Key Highlights
- BTC rallied approximately 25% toward $80,000 following the U.S. Treasury’s decision to expand buyback operations on longer-dated government bonds
- Nearly $4 billion worth of short cryptocurrency positions faced liquidation during the price surge
- Spot Bitcoin ETFs in the United States recorded $1.6 billion in net inflows over the past week
- Strategy’s portfolio of 840,447 BTC has returned to profitability with unrealized gains exceeding $2 billion
- Market observers indicate the rally stemmed partially from a historic short squeeze rather than solely from enhanced macroeconomic fundamentals
Bitcoin experienced an approximately 25% surge this week, climbing beyond $78,000 and reaching an intraday peak of $79,500, following a U.S. Treasury policy adjustment that helped reduce long-term government bond yields from their highest levels in 19 years.
The Treasury Department revealed plans to expand its buyback program for longer-maturity government securities, increasing purchase volumes to $4 billion per operation from the previous $2 billion level. This policy change contributed to a decline in the 30-year Treasury yield from 5.34% to approximately 5.19%.
The announcement sparked a cascade of forced liquidations as bearish market participants faced margin calls. Approximately $4 billion in cryptocurrency short positions were liquidated during Thursday and Friday’s trading sessions.
Market experts quickly provided perspective on the rally’s drivers. “The Treasury effectively released built-up pressure, and cryptocurrency markets interpreted this as a fundamental policy transformation,” explained Shawn Young, chief analyst at MEXC Research. He cautioned that Bitcoin’s climb toward $70,000 appears potentially premature considering Treasury securities continue offering yields approaching 5%.
Jeff Ko, chief analyst at CoinEx, characterized the buyback program as “primarily a signal, representing a subtle policy backstop for long-duration bonds,” rather than representing a fundamental shift in monetary conditions. He emphasized this does not constitute quantitative easing.
ETF Investment Flows Show Strong Recovery
U.S. spot Bitcoin ETFs recorded $1.6 billion in net inflows throughout the week. BlackRock’s IBIT fund alone captured $503 million on Thursday. Total ETF assets under management rose above $85 billion, up significantly from approximately $70 billion in June.
Analyst Ted Pillows highlighted on X that Bitcoin ETFs accumulated $1.92 billion in BTC this week ā representing the largest weekly inflow recorded since October 2025. He emphasized that Bitcoin successfully breached every significant resistance threshold, with the $78,000ā$80,000 range now representing the crucial testing zone. Sustained price action above this range, he suggested, would signal the conclusion of the bearish cycle.
Investment research firm Bernstein attributed the price rebound to enhanced market liquidity, recovering ETF demand, and an increasingly favorable regulatory environment. Their analysts anticipate expedited SEC and CFTC rulemaking on subjects including tokenized securities and prediction markets.
Strategy’s Bitcoin Position Returns to Profitability
Strategy presently maintains a position of 840,447 BTC bought at an average cost basis of $75,385. With Bitcoin trading near $78,000, the company’s holdings show an unrealized gain surpassing $2 billion.
The company liquidated roughly 0.8% of its Bitcoin holdings in recent weeks to fund dividends and share repurchases of its STRC preferred stock. Bernstein forecasts Strategy will restart its accumulation strategy as STRC approaches its $100 nominal valuation.
Ko identified Bitcoin’s 200-day moving average positioned near $69,000 as the crucial technical benchmark. Bitcoin has successfully cleared this threshold and must maintain support above this level despite government bonds continuing to offer investors yields near 5%.
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