Bitcoin Soars to Three-Year High on Bond Yield Drop and ETF Inflows

Bitcoin is experiencing its strongest weekly rally in more than three years as investors respond to falling long-term US bond yields and increased institutional demand. The world's largest cryptocurrency climbed as much as 9.4% and was trading near $77,500 in late New York trading, with a weekly gain of roughly 23%. This surge could potentially mark its biggest seven-day increase since March 2023.

The latest rally followed US Treasury Secretary Scott Bessent's announcement that the government would at least double its purchases of longer-dated bonds. This move pushed long-term yields lower and encouraged investors to increase exposure to riskier assets, such as Bitcoin. The rally was also amplified by a wave of short-position liquidations, with nearly $2.5 billion in leveraged bearish Bitcoin positions and about $4.5 billion across cryptocurrencies reportedly liquidated over three days.

Institutional demand has provided another boost to the cryptocurrency market. US-listed spot Bitcoin ETFs are heading for their strongest weekly inflows since January, with the 13 funds attracting more than $1 billion so far this week. Shares of crypto-linked companies also rallied, with Coinbase gaining 8.2%, Strategy rising 6% and Circle advancing 5.2%. Despite the rally, Bitcoin remains well below its record high of more than $126,000 reached last October.