A combination of falling US Treasury yields, fueled by an expanded long-dated bond buyback program, and a high-profile White House meeting between President Trump and crypto industry leaders has propelled Bitcoin above $70,000 for the first time in over two months. The leading cryptocurrency surged more than 11% in the past 24 hours, trading at $71,871 at the time of writing. The broader digital asset market followed suit, with Ethereum climbing over 19% and SOL gaining nearly 13%. Additionally, HYPE, the token associated with offshore exchange Hyperliquid, jumped more than 24% following Trump's indication that the US is exploring ways to allow the derivatives trading platform to operate domestically.
With long-term Treasury yields recently hitting multi-year highs, the Treasury Department made a surprise announcement to intensify its buyback of long-dated securities. On Wednesday, just two weeks after unveiling its quarterly bond repurchase schedule, the department stated it would at least double the size of its "liquidity support buyback operations" targeting bonds with maturities ranging from 10 to 30 years. Treasury Secretary Bessent, who activated the buyback program last year, has described it as part of "a full suite of tools" that the department "can deploy if necessary" to address disorderly conditions in the Treasury market. Following the news, yields across all maturities declined, while the US dollar slid to a three-month low.
When Treasury yields fall and the dollar weakens, risk assets tend to rally, and we've already seen Bitcoin move higher on this news, said Jeff Mei, Chief Operating Officer at BTSE. Rajiv Sawhney, Head of International Portfolio Management at Wave Digital Assets, noted that yield curve control "is the second-largest factor on our list of potential catalysts that could drive a sustained Bitcoin rally." He added that the biggest catalyst would be a government mandate to purchase Bitcoin as a national reserve asset.
Meanwhile, positive sentiment returned to the crypto market following Trump's meeting on Wednesday with executives from major companies including Coinbase, Payward, and Blockchain.com Group. The meeting reignited optimism surrounding the Digital Markets Asset Clarity Act, also known as the CLARITY Act, which aims to establish a market structure for cryptocurrencies but failed to secure a vote before the Senate's August recess. The legislation had stalled due to disputes over ethics provisions. Trump urged the Senate to pass the bill, which is expected to be reconsidered when the chamber reconvenes in mid-September.
Adding to the momentum, large Bitcoin holders, commonly known as whales, and institutional buyers have returned to the market this week. Over the past 60 days, Bitcoin whales have accumulated approximately $2.75 billion worth of the cryptocurrency. Concurrently, US-listed spot Bitcoin exchange-traded funds (ETFs) saw significant inflows from Monday through Wednesday, with 13 ETFs collectively attracting over $1 billion this week, reversing the $389.7 million in outflows recorded last week. Vladimir Tikhomirov, co-founder of decentralized finance company Algebra, stated that the latest inflow data from US crypto spot ETFs "is further proof that institutional demand for digital assets is steadily growing."
For months, crypto traders have been searching for a market bottom during the bear phase that began in October, when Bitcoin briefly exceeded $126,000 before experiencing a sharp selloff that extended into this year. On the technical front, some analysts suggest the damage inflicted on Bitcoin's chart over the past few months may be nearing its end, with a rally driven by ETF flows, a weaker dollar, and institutional buying expected to commence between the end of the fourth quarter of 2026 and early 2027.
However, bearish factors for the crypto market remain significant. The slow progress of US crypto legislation and considerable regulatory uncertainty continue to weigh on the sector. Should inflation rebound, the Federal Reserve's persistence with high interest rates would continue to suppress risk assets like cryptocurrencies. Even with periodic rebounds, selling pressure from holders trapped at higher price levels could limit Bitcoin's upside potential. Furthermore, the latest surge has reactivated options trading activity. According to Deribit, there are currently $1.5 billion worth of Bitcoin call options with a strike price of $70,000, which generate profits when Bitcoin rises above the set price. Meanwhile, put options with a strike price of $60,000 amount to $1.4 billion, profiting if Bitcoin falls below that level. The similar scale of both suggests traders are bracing for heightened market volatility.
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