Bitcoin blasts past $72,000 as Trump, Treasury buybacks wipe out $3.1B in shorts

Bitcoin surged above $70,000 for the first time since June as falling Treasury yields and Washington’s crypto push crushed bearish bets.

Data from CryptoSlate shows that BTC extended its breakout above $72,000 on Thursday, taking its gain since Monday to roughly 15%. It has climbed to $72,207 as of press time.

Blockchain analysis firm Glassnode said the daily move amounted to a 5.8-standard-deviation gain relative to Bitcoin’s 30-day volatility, its largest upside shock since October 2023.

The advance followed the US Treasury’s decision to double planned buybacks of long-dated government debt and President Donald Trump’s renewed push for crypto legislation at a White House meeting with industry executives.

Treasury lit the fuse before Trump added fuel

The Bitcoin rally began in the bond market on Aug. 19 when the Treasury Department said it would raise the maximum size of liquidity-support buybacks for 10- to 30-year securities to at least $4 billion per operation from $2 billion, starting Sept. 9.

The move came after the 30-year Treasury yield reached 5.34%, its highest since 2007.

Following the announcement, Treasury yields fell, easing one of the pressures that had weighed on risk assets as investors confronted rising US borrowing costs. CryptoSlate reported that Bitcoin began breaking through a trading range that had capped it near $67,000 for much of the summer.

Trump then gave the rally another catalyst.

Speaking alongside executives including Coinbase CEO Brian Armstrong, Ripple's Brad Garlinghouse, and Kraken co-CEO Arjun Sethi, Trump urged lawmakers to pass a “fair version” of the CLARITY Act.

This legislation is designed to establish which digital assets fall under securities or commodities rules and how oversight is divided among federal regulators.

The bill stalled before the Senate’s August recess, and a procedural vote is scheduled for Sept. 15. It will need 60 votes to advance.

Armstrong echoed Trump's view on the legislation on X, saying:

“Today’s message from POTUS was clear: This Administration is committed to passing the Clarity Act — answering voters’ call for consistent rules for crypto. Regulators are aligned, Congress has set a date, and the entire industry is ready to get this across the finish line. 67M Americans own crypto, and they want this legislation. I’m confident the Senate will listen.”

During the meeting, Trump also floated the possibility of expanding US government crypto holdings when asked whether the administration could acquire substantial amounts of Bitcoin or other digital assets.

“Well, it’s been talked about,” Trump said, adding that he would rely on recommendations from SEC Chairman Paul Atkins, CFTC Chairman Michael Selig and other officials.

The remarks stopped short of announcing purchases.

Trump’s 2025 executive order created a Strategic Bitcoin Reserve using government-held Bitcoin and directed officials to explore budget-neutral ways to acquire more. This means any large new buying program would still depend on how the administration proposes to finance it.

Bitcoin short squeeze gives way to profit-taking risk

Once Bitcoin broke above its recent price range, the rally began feeding on itself.

CoinGlass data showed more than $3.1 billion of bearish crypto positions were liquidated over 24 hours, compared with about $277 million of longs.

Bitcoin accounted for roughly $1.8 billion of those short liquidations, while Ethereum traders lost nearly $1.2 billion. The largest single liquidation was a $48.8 million BTC position on Hyperliquid.

As prices rose, exchanges automatically closed increasingly unprofitable short positions, forcing traders to buy Bitcoin back and adding further upward pressure. The cascade helped turn the initial macro- and policy-driven advance into an unusually sharp breakout.

The rally also created an incentive for existing holders to take profits.

Bitcoin’s move through $70,000 carried it above the roughly $67,100 average cost basis of short-term holders, according to CryptoQuant. Those investors subsequently sent more than 44,300 BTC held at a profit to exchanges, the largest such profit-taking wave we've seen this year.

Risk appetite has also returned quickly. The Crypto Fear & Greed Index climbed to its highest level since October 2025, when Bitcoin reached its latest cycle peak.

That leaves the rally entering a different phase. Bitcoin has cleared its 200-day moving average near $69,000 and broken through $70,000, but the liquidation cascade has already removed much of the bearish leverage that helped propel the move.

The next test is whether fresh spot demand can absorb profit-taking and keep Bitcoin advancing after the forced buying fades.