Bitcoin posts best August in nine years amid record ETF inflows

Bitcoin ↗ 0.62% is on track to close August with a gain of roughly 25%, its strongest August since 2017 and its best month overall since November 2024, after a rally that briefly pushed it above $80,000 for the first time in about three months. The surge was fueled by record monthly inflows into U.S. spot Bitcoin ETFs, a revival of the so-called debasement trade, and a wave of short liquidations that amplified the move higher.galaxy+1

ETF Demand and a Historic Weekly Surge

U.S. spot Bitcoin ETFs logged eight consecutive days of net inflows through Wednesday, pushing August's total past $3 billion — the strongest month of 2026 and roughly double what April managed, according to data tracked by PrimexBT and SoSoValue. The week ending August 23 alone accounted for approximately $1.92 billion of those inflows.kucoin+2

That same week delivered Bitcoin's largest single-week dollar gain in its history. Galaxy Digital ↘ 8.22% reported that Bitcoin rose $14,775 between August 16 and August 23, a 23.5% weekly advance — the biggest percentage gain since March 2023. Galaxy analysts noted that Bitcoin is now testing its 50-week moving average near $81,800, a level that has historically confirmed the end of bear markets. In four of five prior completed bear markets, a weekly close above that average meant the bottom was definitively in.galaxy

The Debasement Trade Returns

A key catalyst was Treasury Secretary Scott Bessent's announcement on August 19 that the U.S. Treasury would at least double the size of its long-dated bond buyback operations, a move investors interpreted as a signal of expanding fiscal accommodation. On the same day, the Treasury disclosed that U.S. public debt had surpassed $40 trillion for the first time.bitcoinmagazine+1

Grayscale's ↘ 2.99% head of research, Zach Pandl, wrote in a note this week that Bitcoin's 90-day correlation with gold has climbed above 50%, up from near zero at the start of the year, while its correlation with the Nasdaq 100 fell from above 60% to roughly 33%. "Unchecked government debt growth undermines the credibility of fiat currencies and drives investors to seek out alternative stores of value like physical gold and certain cryptocurrencies," Pandl wrote, as reported by Bitcoin Magazine.finance.yahoo+1

Warsh Speech Adds a Hawkish Wrinkle

The rally faces a fresh headwind after Fed Chairman Kevin Warsh delivered his Jackson Hole keynote on Friday, August 28, calling inflation "too high" in his first extended assessment of the economy since taking office. Markets interpreted the speech as hawkish, with fed funds futures showing a 40% probability of a September rate hike, rising to 70% by December. Bitcoin pulled back from its weekly high above $81,000, trading near $77,400 on Friday afternoon.cnbc+3

Whether this month's gains mark the start of a new cycle or a sharp bear-market rally may hinge on whether buyers can defend the $76,000–$80,000 range in the weeks ahead — and on how far Warsh is willing to go.