Bitcoin Soars 23% as Treasury Yields Fall and Institutional Demand Rises

Bitcoin is experiencing its strongest weekly gain in over three years, surging around 23% this week as lower Treasury yields and renewed institutional demand fuel a broad-based crypto recovery.

The cryptocurrency's price reached $77,000 on Thursday, compared to roughly $62,800 at the start of the week. This rally has also had a positive impact on crypto-linked stocks, with Coinbase and Circle gaining more than 9% each, while Strategy advanced 7%.

According to Max Stuedlein, head of partnerships at Sygnum APAC, Bitcoin's move reflects an alignment of macroeconomic and policy catalysts. The Treasury's decision to increase buybacks of long-dated government debt has pulled longer-term yields lower, easing pressure on risk assets and helping revive demand for cryptocurrencies.

A short squeeze has also played a major role in the rally, with roughly $2.7 billion in crypto short positions being liquidated as the price accelerated. This has continued to play a significant part in the rally, with nearly $2.5 billion in leveraged bearish bets on Bitcoin and $4.5 billion across all crypto assets having been liquidated over the past three days.

Large Bitcoin holders are also returning to the market, accumulating roughly $2.75 billion worth of the cryptocurrency over the past 60 days. This has put Bitcoin back at the centre of the risk-on trade, but with leverage playing a major role in the latest move, investors will be watching closely to see whether the rally can hold once the forced buying fades.