Bitcoin Prices Skyrocket on US Treasury Move and CLARITY Act Push
Bitcoin's price surged by $14,775 in a single week, marking its largest one-week dollar increase in history. The rally was driven by two key factors: the US Treasury's decision to double its long-bond buyback operations and President Trump's call for Congress to pass the CLARITY Act, which would establish federal rules for classifying digital assets as securities or commodities.
The move also triggered a short squeeze, where traders who had bet against Bitcoin were forced to close their positions, accelerating the cryptocurrency's fastest bull flip in a year. According to CNBC, roughly $2.7 billion in short positions were liquidated across crypto markets that week.
The surge in price was accompanied by a sharp increase in sentiment, with the Crypto Fear and Greed Index reaching 74 on August 25, its highest level since October 2025. Additionally, spot Bitcoin ETF demand returned, with weekly inflows reaching their strongest level since October 2025, according to Galaxy Research data.