Bitcoin surged Friday on optimism over U.S. cryptocurrency legislation and the U.S. Treasury’s surprise move to buy back more of its own bonds, which fuelled a shift to riskier assets.
The world’s biggest cryptocurrency by market value climbed 6.9 per cent to US$77,675.94, after reaching its highest level since May, and is up more than 20 per cent since Wednesday.
Friday was the third consecutive day in which bitcoin jumped more than five per cent.
The sharp rise came after U.S. President Donald Trump urged lawmakers on Wednesday to pass the Clarity Act, a bill to spur cryptocurrency use that has stalled in the Senate.
Bitcoin was also boosted by the U.S. Treasury’s bid to lower long-term borrowing costs by doubling its sovereign bond buybacks, a move that lifted investors’ risk appetite.
The intervention came after the 30-year Treasury yield surged to levels last seen in 2007, just before the global financial crisis.
The prospect of lower yields makes safer investments less attractive, helping to drive demand for riskier assets such as cyptocurrencies.
“Renewed optimism around crypto progress in Washington helped light a fire under Bitcoin,” said Bret Kenwell, U.S. investment analyst at eToro.
“Falling Treasury yields and short liquidations added fuel to the rally,” he said.
