Bitcoin tops $75,000 as Treasury buyback plan fuels 20% weekly gain

Bitcoin rose 4.2% to $75,343 early Friday, on track for a 20% weekly gain, after Treasury Secretary Scott Bessent doubled long-dated bond buybacks.

"The Treasury's decision to double its buybacks of long-dated government debt is aimed at addressing long-term yield concerns, where borrowing costs have been rising on concerns over US debt levels and partial crowding out by debt issuances of hyperscalers," Max Stuedlein, head of Partnerships at Sygnum APAC, said.

The rally began Wednesday when Treasury yields pulled back sharply following the intervention in the bond market. The 30-year yield retreated from Tuesday's high of 5.34% to around 5.19%, while the 10-year yield declined to 4.647%. That helped trigger a broader move into crypto, amplified by a short squeeze that liquidated roughly $2.7 billion in crypto short positions, according to CoinGlass. Vetle Lunde, head of research at K33 Research, noted this marked the first time in Bitcoin's history that billions of dollars in short positions were wiped out in a single day.

Bitcoin remains well below its 2026 high of $94,820 achieved in mid-January and an all-time high of $126,198 hit on October 6 last year. Resistance sits at $80,000, with the SMA60 near $87,000, while support is at $70,000 and $66,000 below.

VanEck's Head of Digital Assets Research Matthew Sigel said the market reaction has nothing to do with the Clarity Act, despite many attributing the rally to the legislation. "This price reaction isn't about the US Clarity Act, which many in the market are pointing to," Sigel said in a note. "This is about what the US Treasury has done, which is reigniting fears of fiscal dominance."

The Treasury will at least double the size of its liquidity-support buyback operations for longer-dated Treasuries, from $2 billion per operation to at least $4 billion, with the new program running from September 9 through November 4. The US dollar posted a cumulative decline of approximately 0.9% this week, approaching a three-month low.

Clarity Act push adds fuel

Investor sentiment improved further Thursday on a last-ditch push from the White House and crypto industry leaders to get the Clarity Act across the finish line in the coming weeks. President Donald Trump met with executives from Coinbase Global Inc. and Payward Inc., urging the Senate to pass the crypto market structure bill that has stalled over ethics provisions. Trump also hinted the government may consider purchasing large amounts of Bitcoin, saying "it has been discussed and would be very beneficial for the dollar."

Crypto stocks followed Bitcoin higher Thursday, with Coinbase closing up 7.5% and Circle up 6.45%, while Strategy rose 7.8%. US spot Bitcoin ETFs recorded a net inflow of approximately $517 million on August 19, the largest single-day inflow since early May, showing institutional capital is re-entering the market. Multiple Bitcoin spot ETFs listed in Hong Kong rose between 5.9% and 6.8%, with Samsung Bitcoin ETF leading at +6.84%. Concept stocks also rallied, with Boyaa Interactive up 18.15% and Linekong Interactive up 9.95%.

Schwab's Head of Crypto Research Jim Ferraioli noted Bitcoin showed little reaction to the latest CPI and PPI data, suggesting the crypto market is driven more by its own idiosyncratic factors. However, Bitwise Europe Head of Research Andre Dragosch argued Bitcoin serves as a macroeconomic "canary in the coal mine" that can signal changes in financial conditions.

The Federal Reserve is set to release its latest meeting minutes this week, and investors are largely adopting a wait-and-see approach pending further clues on monetary policy direction. Against the backdrop of the Treasury's expanded buyback operations, concerns over fiscal dominance may continue to provide support for alternative assets like Bitcoin.

This article is for informational purposes only and does not constitute investment advice.