Bitcoin climbed more than 23% toward $79,000 across several sessions ending Friday. The driver was not pure speculation. A shift in US Treasury debt management dragged long-dated bond yields lower and set off the largest crypto short squeeze in weeks.
Analysts traced the catalyst to the Treasury’s plan to at least double buyback operations for 10- to 20-year and 20- to 30-year coupon bonds. The expanded program runs Sept. 9 through Nov. 4.
The market reacted fast. Bitcoin jumped more than 6% to nearly $69,000 immediately after the announcement, its highest since early June, per CoinMarketCap. By Friday it had blown past $79,000. Renewed institutional buying, improving macro conditions and a friendlier regulatory outlook collided with billions in short liquidations. Ether crossed $2,400 in the same window.
Geoff Kendrick, an analyst at Standard Chartered, called the buyback expansion “exactly the type of thing Bitcoin loves” in a client note. He set a $100,000 year-end target on BTC and flagged $65,500 as the key technical level. A clean break above it, he wrote, would confirm the cycle low is in.
Lower long-end yields weaken the dollar. That revives what Lacie Zhang, research analyst at Bitget Wallet, described as the “debasement trade” across Bitcoin and gold. Investors rotate into hard assets as fiat purchasing power comes under pressure. Zhang said the rally “looks like a convergence of three forces”: a more supportive macro backdrop, declining regulatory risk in Washington, and stronger spot demand.
The squeeze piled on. More than $4 billion in crypto shorts were liquidated over two to three days, Zhang said. Roughly $2.7 billion went out during one 24-hour period. About $1.2 billion followed the next day. Bitcoin shorts alone accounted for approximately $2.75 billion during the initial squeeze.
Spot ETFs absorbed the pressure. US spot Bitcoin ETFs pulled in roughly $517 million on Aug. 19 and about $606 million on Aug. 20, Zhang said. More than $1 billion over two days. Funds had already drawn $853.5 million over five consecutive trading sessions earlier in the month. Julio Moreno, an analyst at CoinShares, said ETFs purchased roughly 7,500 BTC in a single day, the highest daily level since April. The break above $70,000 forced short covering and pulled momentum buyers back in, Zhang said.
Moreno attributed the initial spark to the Treasury announcement and Trump’s remarks about the US government potentially buying Bitcoin. “However, Bitcoin spot demand was already showing signs of growth days before,” he said.
That complicates the clean Treasury narrative. Spot demand was building before the buyback news broke.
The regulatory tailwind is softer than the macro one. Trump told crypto and finance executives at a White House meeting to push Congress for a “fair version” of the Clarity Act, legislation that would establish a federal framework for digital assets and split oversight between the CFTC and SEC. The bill remains stalled. The Senate is expected to revisit it in September. CFTC Chair Michael S. Selig said Thursday he directed staff to explore crypto market-structure rules under the commission’s existing authority.
Zhang said “the regulatory risk premium is being repriced lower” after Trump urged Congress to pass crypto market-structure legislation.
Moreno cautioned against overweighting the Clarity Act for Bitcoin. “Bitcoin already has relatively high regulatory certainty in the US,” he said. “It is widely treated as a commodity, spot ETFs are established, and institutional access already exists. The Clarity Act does not radically change Bitcoin’s investability in the same way it potentially does for many other crypto assets.”
Similar periods of spot-demand growth, he added, have historically preceded a median 23% Bitcoin gain over the following two months. Whether this rally holds above Kendrick’s $65,500 line is the open question.
