Bitcoin Surpasses $80,000 as Altcoins Rally. Optimism Returns to the Crypto Market

The crypto market has just experienced one of its strongest weeks of the year. After several months of weaker performance, Bitcoin climbed back above the $80,000 mark. Altcoins also posted strong gains, while billions of dollars are once again flowing into U.S. spot ETFs. The sharp shift is also visible in investor sentiment. Within just one week, the Crypto Fear & Greed Index moved from the fear zone into the greed zone.

U.S. Treasury Buybacks Supported Crypto Market Growth

One of the main drivers of the rally was the U.S. Treasury’s decision to expand its buyback programme for long-term government bonds. On 19 August, Treasury Secretary Scott Bessent announced an increase in the maximum volume of buybacks of 10-, 20- and 30-year bonds from $2 billion to at least $4 billion. The primary aim of the move was to improve liquidity in the bond market and ease pressure caused by high interest rates. The announcement came at a time when U.S. Treasury yields were trading close to their highest levels since 2007.

U.S. government bond yields subsequently declined, while the U.S. dollar also weakened. Lower yields on dollar-denominated assets reduce their attractiveness, prompting some investors to seek higher return potential in riskier assets. A weaker dollar also tends to support assets priced in dollars, including Bitcoin and gold. The combination of lower yields and a weaker currency therefore created a favourable environment for cryptocurrencies and other risk assets.

Treasury bond buybacks are not the same as quantitative easing by the Federal Reserve. The Treasury does not create new money to purchase assets. For the crypto market, however, the key factor is the signal that this step sent. Investors began to expect that Washington could intervene if high bond yields started placing too much pressure on the economy and increasing the cost of financing U.S. debt. This development once again reopened the debate about the declining purchasing power of the dollar. In such an environment, Bitcoin is often viewed similarly to gold – as an asset with a limited supply that cannot be created arbitrarily by a government or central bank. This also increases investor interest in Bitcoin.

Bitcoin Surpasses $80,000 as Altcoins Gain Momentum

Bitcoin reacted to the more favourable macroeconomic environment with a sharp increase, breaking above the $80,000 mark. The rally was also supported by the mass closing of leveraged short positions.

Traders who had bet on further price declines were forced to close their positions, triggering a short squeeze worth several billion dollars. The rally, however, did not stop with Bitcoin. Capital quickly began rotating into altcoins, and the upward movement spread across a large part of the crypto market. Ethereum gained approximately 30% within several days, Solana around 31%, and XRP 40%. Other altcoins also recorded strong double-digit gains.

Chart No. 1: Total Crypto Market Capitalisation in EUR Over the Past Two Weeks

Source: CoinMarketCap

The breadth of the rally is one of the main differences compared with previous short-term recoveries in the crypto market. This time, capital was not concentrated only in Bitcoin or a few selected tokens. Instead, a broad part of the market recorded gains. Bitcoin posted one of its strongest weekly moves in recent years, creating room for a gradual rotation of capital towards riskier altcoins.

Positive sentiment is also being supported by a more favourable regulatory environment in the U.S. The Trump administration continues to push for clearer rules for digital assets, with market attention focused mainly on the CLARITY Act and additional regulations being prepared by the SEC and CFTC.

Billions of Dollars Are Flowing Back Into Bitcoin ETFs

Another important signal is the return of capital to U.S. spot Bitcoin ETFs. The funds recorded six consecutive trading days of net inflows, during which investors contributed approximately $2.26 billion. Between 17 and 21 August alone, around $1.92 billion flowed into the funds, making it their strongest week since October 2025.

20 August was particularly strong, with spot Bitcoin ETFs recording approximately $606 million in net inflows, the highest daily result since early May. Inflows continued over the following trading days, with the largest fund, BlackRock’s iShares Bitcoin Trust (IBIT), attracting a significant share of the new capital.

Table No. 1: Bitcoin ETF Flows Over the Past Two Weeks in USD Millions

Source: Glassnode

The total value of assets managed by U.S. spot Bitcoin ETFs increased to approximately $98.6 billion, bringing them close to the significant $100 billion threshold for the first time. However, the increase in assets under management was driven not only by new investor inflows, but also by the rise in Bitcoin’s price itself.

Strong inflows suggest that Bitcoin’s current rally is not being supported solely by the closing of short positions and short-term speculation in derivatives markets. New capital is also entering the market through regulated ETFs, which institutional and retail investors use to gain exposure to Bitcoin without having to hold it directly.

Growing investor interest is not limited to Bitcoin. U.S. spot Ethereum ETFs also recorded six consecutive days of net inflows, attracting approximately $813 million. Positive developments were also visible among funds linked to other cryptocurrencies. This suggests that as market sentiment improves, investor interest is gradually expanding beyond Bitcoin itself.

Fear & Greed Index Jumps by 40 Points

A significant shift can also be seen in investor sentiment. On 17 August, the Crypto Fear & Greed Index stood at 31 points, corresponding to the fear zone. Ten days later, the index reached 71 points. In less than two weeks, it therefore increased by 40 points, moving from the “fear” zone directly into the “greed” zone.

Image No. 1: Fear & Greed Index

Source: alternative.me

Such a sharp move illustrates how quickly sentiment in the crypto market can change. Just a few days earlier, investors were dominated by concerns over persistent inflation, high U.S. Treasury yields and the possibility of further declines in Bitcoin. However, after Bitcoin climbed above $80,000, altcoins posted strong gains and inflows into spot ETFs continued, market sentiment shifted significantly.

The rise in the Fear & Greed Index also suggests that investors are more willing to take on risk and are therefore entering the market even at higher prices. This can support further growth, as stronger optimism typically leads to greater trading activity and higher demand. On the other hand, rising euphoria also increases the likelihood of sharper short-term volatility.

Very positive sentiment therefore does not automatically mean that the rally will continue at the same pace. After a rapid price move, the market may enter a period of consolidation, profit-taking or a short-term correction. The closer investor sentiment moves towards extreme levels of optimism, the more attention should also be paid to the risk of the market becoming overheated.

Is the Crypto Market Entering a New Phase of Long-Term Growth?

Current developments provide several signals that the crypto market could be entering a new growth phase. Bitcoin has returned above $80,000 after a weaker period, capital is once again flowing into spot Bitcoin ETFs, and the rally is gradually spreading to Ethereum and other altcoins. A weaker U.S. dollar, lower bond yields and a more favourable regulatory environment in the U.S. are also providing support.

However, it is still too early to confirm a long-term bullish trend. After such a sharp rally, the market may experience consolidation or profit-taking, while future developments will depend mainly on the geopolitical situation, interest rate trends, inflation, overall investor appetite for riskier assets and further developments in U.S. crypto regulation. The CLARITY Act could be an especially important factor, as its potential adoption could provide clearer rules for the U.S. crypto market and encourage greater participation by institutional investors.

If favourable conditions persist, Bitcoin could gradually approach the $95,000 to $100,000 range. However, it will be important to see whether the current rally is supported by a sustained inflow of new capital rather than only short-term short covering and improved market sentiment.

Take Advantage of the Current Crypto Market Growth with Fumbi

The cryptocurrency market has strengthened significantly in recent days. Following a strong rally, Bitcoin climbed above $80,000, while the upward momentum has gradually spread to Ethereum and other cryptocurrencies.

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