Bitcoin surged above $71,000 on Thursday for the first time since June, rallying roughly 7% in a single session as President Trump pressured Congress to advance the Digital Asset Market Clarity Act and the US Treasury announced a dramatic expansion of its long-dated bond buyback program.
The world’s largest cryptocurrency opened at $69,289 on August 20, climbing from around $64,700 the previous day in a move that briefly touched close to $70,000 before consolidating above $69,000. The rally was amplified by a massive short squeeze, with more than $1 billion in leveraged short positions liquidated within 24 hours, according to IG UK and CoinDesk. Ethereum jumped roughly 17% to above $2,250, while Solana and XRP also posted double-digit gains.
Treasury Buyback Expansion Sparks Risk-On Shift
The primary catalyst was a US Treasury announcement that it would at least double the size of its long-dated bond buyback operations, from $2 billion to at least $4 billion per operation, starting September 9. Bond buybacks reduce the supply of outstanding government debt and push yields lower, making risk assets like crypto relatively more attractive to investors.
A Bloomberg index of Treasuries maturing in 20 years or more jumped 1.7% on Wednesday, its biggest single-day gain since February 2025. Similar moves were recorded in Japanese, Australian, and New Zealand government bonds, signaling a broad shift in global fixed-income markets that spilled over into digital assets.
Trump Urges Congress to Pass Clarity Act
At a White House event on Thursday, Trump met with executives from Coinbase, Gemini, Ripple, and Chainlink Labs and publicly urged lawmakers to pass the Digital Asset Market Clarity Act, a market structure bill that has been stalled in the Senate for months. The bill would establish clear rules for when digital assets are classified as securities versus commodities, giving exchanges and issuers a federal regulatory framework.
President Trump and Congress delivered the GENIUS Act, establishing a landmark framework and clear rules of the road for payment stablecoins, and Treasury is moving quickly to implement that framework.
Trump’s remarks, reported by Proactive Investors and Reuters, signaled that the administration is accelerating its push to position the US as the global crypto capital ahead of midterm elections where digital asset firms have emerged as major political donors.
Short Squeeze Amplifies the Move
The technical dynamics of the rally were as notable as the fundamental catalysts. With $209.6 million in short liquidations accounting for 95.5% of all liquidated positions, the squeeze created a self-reinforcing feedback loop as forced buying pushed prices higher, triggering further liquidations. Open interest across crypto futures rose 7.3% during the session.
The Fear and Greed Index jumped 21 points in seven days to reach 47 out of 100, moving from extreme fear territory into neutral range. Despite the improvement, analysts caution that sentiment has not yet reached greed levels, suggesting the recovery may still have room to run.
Sources: IG UK; CoinDesk; Proactive Investors; Reuters; CoinPaprika
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