Bitcoin and gold dropped sharply from January highs before this week’s rally
Bitcoin climbed above $77,000 on Friday and gold rose to $4,661, capping a week of gains fueled by a jolt in the bond market and government moves in Washington.
The rebound marked a sharp reversal for both assets after months of declines. Bitcoin had fallen from a January high around $95,000 to below $60,000 at the end of June. Investors had shied away from speculative assets earlier in the year, and crypto supporters were concerned about the lack of movement on proposed regulation of the industry.
Gold followed a similar arc, hitting a high above $5,300 in January before dropping to around $4,000 in June, when rising rates made interest-bearing investments more attractive.
The week’s first big move came Wednesday, when the Treasury Department announced plans to significantly increase its buybacks of long-term Treasurys, or government debt. On the same day, President Donald Trump, who made about $1.2 billion last year from various crypto holdings, urged Congress to move quickly on crypto legislation.
The announcements produced an almost immediate reaction. The dollar sold off, and the value of gold and bitcoin jumped as investors moved toward alternative assets.
The rapid turn in bitcoin and gold this week is best understood in the context of those bond-market and Washington developments, which together pulled the two assets sharply higher after a months-long slide.