Bitcoin Nears $70,000 as US Treasury Expands Buybacks, Triggering Massive Short Squeeze

Bitcoin surged more than 8% intraday on Wednesday (August 19), peaking at $69,970 and approaching the psychologically important $70,000 level—its highest since early June and the largest single-day gain since March. Ethereum (ETH) rallied in tandem, climbing as much as 12% intraday, also its biggest one-day jump since March.

The immediate catalyst for the rapid advance was a liquidity measure announced by the US Treasury Department that day. The Treasury said that effective September 9, it would at least double the per-operation cap on liquidity support buybacks for 10- to 30-year nominal Treasuries from the current $2 billion to $4 billion, with the adjustment running through November 4. Following the announcement, the 30-year Treasury yield—which had just hit a roughly 20-year high the previous day—retreated, and the dollar weakened in tandem, creating a more favorable funding environment for risk assets including bitcoin.

Adam McCarthy, head of research at crypto market research firm LO:TECH, said shorting bitcoin had become one of the more crowded trades in the market over the past few weeks, and the policy signal from the Treasury clearly boosted investor confidence, triggering a rapid return of capital.