Bitcoin surged 24% to $78K in one week driven by US Treasury bond buyback expansion, massive short squeeze liquidations, spot ETF inflows, and pro-crypto regulatory signals from the White House.
Macro & Markets ·
Bitcoin climbed 24% to $78,000 over a single week, with multiple factors converging to drive the rally. The U.S. Treasury Department announced it would double the maximum size of long-term government bond buybacks from $2 billion to at least $4 billion per operation beginning September 9, a move that compressed yields, weakened the dollar, and released liquidity into risk assets. In parallel, short liquidations reached between $1.5 billion and $2–4 billion as traders holding bearish positions were forced to cover at rising prices, amplifying the upward momentum through cascading buyback demand.
Institutional inflows reinforced the advance. Spot Bitcoin ETFs in the U.S. recorded significant daily inflows of $517 million on August 19 and $606 million on August 20, signaling sustained institutional appetite. Political tailwinds also contributed, as President Donald Trump signaled support for the Clarity Act—a regulatory framework proposal for cryptocurrency markets—during meetings with government officials and industry executives, lifting sentiment around clearer U.S. crypto rules.
The relative importance of each driver and their durability as Bitcoin consolidates above $78,000 remain to be tested as market conditions evolve.