Are we back? Bitcoin's 23% rally on US debt policy
The are back bitcoins rally narrative gained real traction this week as Bitcoin surged more than 23%, crossing above its 200-day moving average and trading near $77,559 while U.S. debt concerns, record deficit spending, and Treasury buyback policy helped channel flows into crypto alongside precious metals. ETF inflows and Washington policy moves added fuel.
Key Takeaways
- Bitcoin gained 23.5% for the week to around $77,559, briefly topping $79,000, and crossed its 200-day moving average for the first time since November 2025.
- The U.S. debt pile crossed $40 trillion, with interest costs now exceeding Medicare, while Treasury pledged to at least double certain debt buyback operations to $4 billion.
- Bitcoin and Ether ETFs took more than $2.61 billion in inflows last week; Polymarket odds of BTC hitting $90,000 before 2027 reached 48%.
- A Federal Reserve Bank of Cleveland study finds crypto ownership is driven more by return expectations than demographics, with past-gain information pulling in new buyers.
- Brussels is reviewing whether DeFi lending vaults should fall under MiCA, with a consultation closing Sept. 30.
Why did Bitcoin rally more than 23% this week?
Confidence returned to crypto markets after Bitcoin's sudden weekly surge. Charting platform Barchart highlighted that BTC crossed above its 200-day moving average for the first time since November 2025—a signal many traders treat as longer-term bullish momentum.
Ethereum rose 31%, Solana gained 28%, and XRP jumped 53%. Publicly listed crypto firms including Canaan, Metaplanet, Coinbase, and Robinhood posted double-digit gains. For more weekly moves, follow our Fintech & Crypto Alerts coverage.
How is US debt policy linked to the crypto surge?
The U.S. debt pile crossed $40 trillion this week, with no clear plan to balance the budget. Annual interest on the debt now exceeds Medicare and ranks second only to Social Security among federal expenses.
The Kobeissi Letter tied rapid gains in precious metals and crypto to inflation, deficit spending, and Treasury policy. Record government deficits and the Treasury Department's pledge to at least double certain debt buyback operations to $4 billion helped drive both asset classes, the letter argued.
Bridgewater founder Ray Dalio recommended allocating roughly 15% of portfolios to gold and "a bit of Bitcoin." He warned a U.S. debt crisis could arrive within three years, give or take two, if current policy continues unchanged.
Does psychology explain why rallies keep pulling in buyers?
A Federal Reserve Bank of Cleveland working paper titled "Do You Even Crypto, Bro? Cryptocurrencies in Household Finance" found that expectations about crypto returns explain ownership better than age, income, or gender.
Crypto owners expected 22% returns over the following year versus 7% among non-owners. In a 2025 experiment, showing households Bitcoin's prior 12-month return raised desired crypto allocations by about 2 percentage points and increased actual purchases by roughly 2.5 points.
The authors wrote that "positive returns attract new participants, which raises the price further"—a feedback loop that may keep volatility central to the asset class for years.
What else moved crypto policy and regulation?
President Donald Trump renewed calls for the CLARITY Act after meeting crypto executives including Coinbase CEO Brian Armstrong. The SEC proposed token offering exemptions now open for a 60-day comment period, while CFTC chair Michael Selig said the agency would advance its own crypto rules if the Senate bill fails.
In Europe, Brussels is reviewing whether crypto lending should fall under MiCA. DeFi lending vaults split roles across owners, curators, allocators, and sentinels, making it difficult to determine who should be regulated before the Commission consultation closes Sept. 30.