Bitcoin on track for 20% weekly gain as investor optimism floods back

Bitcoin was on track for a weekly gain of around 20% early on Friday, following a spate of positive developments for the world's largest cryptocurrency.

Bitcoin was last seen at $75,343.01, up from $62,836.88 at the start of the week. Crypto stocks followed suit on Thursday, with Coinbase and Circle closing up 7.5% and 6.45% each, while Strategy rose 7.8%. 

The rally began Wednesday when Treasury yields pulled back sharply following the Treasury's bombshell intervention in the bond market, easing pressure on risk assets. 

That helped trigger a broader move into crypto, which was later amplified by a massive short squeeze, with roughly $2.7 billion in crypto short positions liquidated, according to CoinGlass. 

Bitcoin/USD year-to-date.

Bitcoin's move reflects an alignment of macro and policy catalysts, according to Max Stuedlein, head of Partnerships at Sygnum APAC.

"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," he said.

Investor sentiment improved further on Thursday largely due to 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. The bill is widely viewed as a key catalyst that could push the market out of the crypto winter that began last fall, but the chances of it passing appear relatively slim. 

Despite the recent rally, Bitcoin remains well below a 2026 high of $94,820 achieved in mid-January and an all-time high of $126,198, which it hit on October 6 last year.

— CNBC's Tanaya Macheel and Justina Lee also contributed to this report.