Bitcoin Breaks Above $80,000 After 22% Three-Day Surge, With Room to Climb

1. Bullish bets on gold are building as investors weigh whether the U.S. Treasury’s plan to expand long-dated bond buybacks will push down Treasury yields and the dollar. Deutsche Bank said the policy shift could send gold above $4,800 an ounce.

Open interest in call options on the SPDR Gold Shares ETF (GLD), which tracks spot gold, exceeded put open interest by about 2.5 million contracts last week, the widest gap since February. Calls are used to bet on higher prices, while puts profit from declines. The imbalance suggests investors are positioning more aggressively for further gains in gold.

Gold has climbed 15% over the past three weeks. It rose more than 5% last week, extending its advance to a fifth straight week. Even so, bullion remains about 17% below its record high.

The Treasury said it would raise the maximum size of each long-dated bond buyback operation to at least $4 billion from $2 billion. Some investors have also speculated that about $1 trillion in the Treasury General Account, or TGA, could be used to fund the purchases.

Michael Hsueh, a Deutsche Bank analyst, said the policy change strengthens the bullish case for gold because it could restrain rises in long-term yields and weigh on the dollar.

The dollar index has fallen about 0.8% this month. Because gold is priced in dollars, a weaker U.S. currency makes bullion cheaper for buyers using other currencies. Lower rates also reduce the appeal of interest-bearing Treasuries, enhancing gold’s relative attraction.

Ray Dalio, founder of Bridgewater Associates, said investors may want to hold as much as 10% to 15% of a portfolio in gold to guard against a debt crisis driven by rising government borrowing.

Investors are also focused on remarks due this week from Federal Reserve Chair Kevin Warsh at the Jackson Hole symposium. Citi said hawkish comments from Warsh could lift the dollar and long-term Treasury yields, slowing gold’s rally, while dovish signals could provide fresh fuel for gains.

2. Bitcoin surged about 22% last week, capping its biggest three-day advance since 2023 and pushing the token above $80,000. Inflows into spot exchange-traded funds, a broad short squeeze and easing selling pressure have bolstered expectations for further gains.

Bitcoin climbed above its 200-day moving average of about $69,050 last week. It then extended the rally and at one point rose more than 2% to $80,501. The 200-day average tracks an asset’s mean price over the past 200 days, and a break above that level is often taken as a sign a long-term downtrend may be ending.

The rally also forced out traders who had bet on lower prices. More than $4 billion of short positions across the digital-asset market were liquidated. In a short squeeze, bearish traders buy back positions to limit losses, accelerating the advance.

Spot Bitcoin ETFs recorded net inflows of $1.92 billion last week, the biggest weekly haul since October of last year. The inflows suggest the rebound was driven not only by forced liquidations but also by discretionary buying from institutional investors and others.

The Treasury’s announcement on expanded long-dated bond buybacks also briefly pulled down long-term yields, helping revive appetite for risk assets. At the same time, concern over U.S. fiscal conditions and inflation has increased demand for Bitcoin as a scarce asset with a fixed supply cap of 21 million tokens.

Needham said Bitcoin miners and digital-asset holding companies sold a combined $4.2 billion of Bitcoin in the first half, relieving much of the selling pressure. Investor sentiment also fell to its lowest level since 2022, meaning fresh inflows could have a larger impact on prices.

22V Research said Bitcoin’s typical weekly move is about 3%, making last week’s 22% jump statistically unusual. Fundstrat said the rally may prove more than a short-term rebound, citing spot ETF inflows, higher trading volume and increased stablecoin issuance.

Ether traded up 1.17% at $2,498, while XRP rose 2.6% to $1.52. XRP has jumped about 50% over the past seven days.

3. Broadcom’s credit-default swap premium has jumped to 120 basis points from about 40 basis points over the past several months, highlighting growing concern in the bond market over the financing structures supporting AI chip sales.

A credit-default swap is a derivative that trades the risk of a company failing to repay its debt. Broadcom bondholders pay a recurring fee to CDS sellers to hedge against default. When the CDS spread widens, that cost rises and the market is assigning greater credit risk to the company.

At 120 basis points, it costs about $120,000 a year to insure $10 million of Broadcom bonds. The move from 40 basis points to 120 basis points means the cost of protection has tripled.

Broadcom’s CDS is not the highest among technology companies. Oracle is at about 220 basis points and SpaceX at about 165 basis points. The issue is less Broadcom’s absolute risk level than the speed of the recent increase relative to other major tech companies.

Investors are focusing on a structure in which Broadcom is doing more than selling AI chips and is also helping support customer financing. The company is involved in $35 billion of financing that includes Apollo Global Management and Blackstone, and more than $60 billion of additional debt could be raised for further chip purchases.

Under the arrangement, investment firms provide funding to a special-purpose vehicle, or SPV, which then buys Broadcom’s custom AI chips and server equipment. Anthropic does not purchase the equipment directly. Instead, it leases computing capacity owned by the SPV and pays rental fees. Broadcom books revenue when the chips are sold.

The risk emerges if AI companies fail to monetize their businesses as hoped. If Anthropic cuts computing investment, the SPV’s lease income and debt-servicing capacity could weaken. If Broadcom has provided guarantees or backstops, it could end up bearing financing obligations just as revenue slows.

Broadcom’s custom ASICs are built for specific customer systems, making them relatively hard to resell to other buyers. That means the residual value of the equipment could drop if customer demand softens.

The surge in CDS does not imply an immediate default risk for Broadcom. It does suggest bond investors are beginning to charge more not only for the company’s AI-chip growth story, but also for the guarantees and financing risks it may be assuming to generate that revenue.

4. China is rapidly raising semiconductor self-sufficiency by output through heavy capital spending. Even so, a shortage of cutting-edge lithography equipment remains a constraint on costs and yields for processes below 7 nanometers, and on dependence on overseas suppliers for high-performance chips.

Goldman Sachs said China’s semiconductor self-sufficiency rate by output rose to 70% in June 2026 from 38% in January 2010. That measure is based on production volume. On a value basis, which reflects pricing and technological sophistication, the rate may be lower.

China is broadening its domestic supply chain beyond etching and deposition equipment to include ion implantation, inspection and metrology tools. The aim is to build capabilities across the full manufacturing chain, from lithography used to draw circuit patterns to etching, deposition, inspection and measurement systems used to identify defects.

China’s biggest constraint is extreme ultraviolet lithography, or EUV. EUV is a key technology for efficiently producing circuits below 7 nanometers, but China cannot import the machines from ASML Holding NV, the Dutch company that is effectively the only commercial supplier, because of U.S. export restrictions.

China is trying to make 7-nanometer-class semiconductors with older deep ultraviolet, or DUV, equipment using multipatterning, which splits circuit formation into multiple steps. But more process steps increase production time and cost, and can also raise error rates and defects. Producing a 7-nanometer chip is one thing; mass-producing it reliably and cheaply is another.

Goldman Sachs said China will still face a supply shortfall of about 34% in advanced logic chips below 7 nanometers in 2035. It also projects China’s AI accelerator performance will improve to 4 petaflops on an FP8 basis by the fourth quarter of 2028, from 320 teraflops on an FP16 basis in 2023.

China’s semiconductor capital spending in 2030 is estimated at $82 billion, 79% above previous forecasts. The spending is being driven by efforts to achieve chip independence, demand from generative AI, responses to export controls and a strategy of prioritizing Chinese-made products.

CXMT, China’s largest DRAM maker, is projected to supply about 50% of domestic DRAM demand by 2028. Its monthly wafer capacity is expected to reach 665,000 in 2030, more than double the level projected for 2026.

Goldman Sachs said CXMT’s commodity DRAM supply in 2028 could reach about 41% of Samsung Electronics Co.’s level and about 50% of SK Hynix Inc.’s. Expanded output from CXMT could put downward pressure on prices for commodity DRAM used in smartphones, PCs and general-purpose servers.

5. Stanley Druckenmiller, chairman of Duquesne Family Office, criticized the U.S. Treasury’s expanded bond buyback policy and said the market should be left to determine long-term Treasury yields.

In a recent Wall Street Journal opinion piece, Druckenmiller wrote that the Treasury market had been functioning normally and conditions did not warrant government intervention in prices. Treasury auctions had not failed, primary dealers had not stopped trading because of weak liquidity, and there had been no wave of forced liquidations.

He pointed to a U.S. fiscal deficit running at about 6% of gross domestic product even with the economy near full employment and inflation still above target. Yet the government can still borrow at rates close to economic growth, which in his view shows financial conditions are accommodative rather than restrictive.

Artificially pushing long-term Treasury yields lower by even 1 basis point, or 0.01 percentage point, would help politicians delay confronting fiscal problems, Druckenmiller wrote. Artificially low rates make the government’s projected interest costs look lower than they really are and dilute the urgency of the national debt problem.

He cited the period from 1942 to 1951, when the Federal Reserve capped long-term Treasury yields to help finance World War II. After the war ended, the cap remained in place, and expanding fiscal deficits and monetary growth eventually led to double-digit inflation.

If the market starts to believe the Treasury is defending a certain yield or bond price, every subsequent rise in yields becomes a test of the government’s resolve, he wrote. To prevent that, the Treasury would have to keep increasing the size of its bond purchases, and in the end it would still lose to market fundamentals.

Druckenmiller also criticized the timing of the expanded buyback schedule because it overlaps with the U.S. midterm election campaign. Even the impression that debt-management policy is being shaped by the political calendar could damage confidence in the Treasury market built over more than 200 years.

“Governments that try to defend prices against economic fundamentals always lose,” Druckenmiller wrote. “Let the Treasury market speak.”

Park Shin-young, New York correspondent, nyusos@hankyung.com