Bitcoin posts largest weekly gain in three years on Treasury bond moves
Bitcoin has posted its largest weekly advance in three years as US Treasury bond buybacks and massive short liquidations drive a broad surge in risk appetite across digital assets.
Bitcoin advanced roughly 23 percent this week, marking its most significant weekly gain since March 2023. The original cryptocurrency jumped as much as 9.4 percent to trade near $77,500 in late New York sessions, approaching the $80,000 level last seen in May.
The primary catalyst was a shift in US fiscal policy. Treasury Secretary Scott Bessent announced the department would at least double its long-dated bond buybacks, a move that pulled long yields lower and broadly lifted risk appetite.
This macroeconomic shift triggered a severe short squeeze that mechanically amplified the rally. Over the past three days, traders were forced to liquidate nearly $2.5 billion in leveraged bearish bets on Bitcoin and $4.5 billion across the broader crypto market, according to Coinglass data.
Bearish positioning had been building in institutional products prior to the move. Short interest in BlackRock’s $55 billion IBIT ETF, the world’s largest, had surged to roughly 3 percent of its float outstanding this year, according to S3.
Institutional capital is now flowing back into the asset class. The 13 US-listed spot Bitcoin exchange-traded funds have added more than $1 billion this week, tracking their largest weekly inflows since January. Additionally, large holders known as whales accumulated approximately $2.75 billion worth of the token over the past 60 days, CryptoQuant data shows.
Political developments provided further sentiment support. President Donald Trump met with executives from Coinbase and Payward, urging the Senate to pass the stalled Clarity Act crypto market structure bill before its August recess.
Market participants observe that the mechanics of the rally are just as important as the political backdrop. Rachael Lucas, an analyst at BTC Markets, stated that while the Treasury buybacks were the real driver, the presidential meeting and ETF inflows added crucial sentiment on top of the technical move.
However, some analysts argue the rally masks underlying structural realities when compared to traditional safe havens. Adam Morgan McCarthy, lead researcher at LO:TECH, pointed out that gold rallied cleanly on the Treasury operations without the forced buying that inflated Bitcoin, making it the truer hedge against currency risk.
Portfolio allocation strategies are also adapting to the shifting landscape. Bridgewater Associates founder Ray Dalio suggested holding 10 to 15 percent in gold and a small amount of Bitcoin to reduce risk, while Standard Chartered’s Geoffrey Kendrick wrote that his $100,000 year-end price forecast might now be too low.
Despite the recent exuberance, the asset remains highly volatile and well below its historical peaks. Bitcoin is still trading far beneath the $126,000 record set last October, which preceded a sharp correction that pushed prices to $58,642 by the end of June.
