Bitcoin Sprints Past $80,000 as Short Squeeze Meets Fresh ETF Money

Bitcoin has surged past $80,000 for the first time since spring, leaving it roughly 24 percent higher over the week. The move has also spread to other major cryptocurrencies, with Ethereum up 31 percent and XRP gaining a staggering 49 percent.

The catalyst for this rally came from Washington, where Treasury Secretary Scott Bessent announced an expansion of buybacks on longer-dated government bonds, hinting at even larger purchases. This move was seen as a sign that the US is treating symptoms instead of addressing genuine fiscal consolidation, causing investors to rotate into alternative assets.

The speed and scale of this rally can be attributed to the mechanics of the derivatives market, particularly the short squeeze. Traders who had bet on further declines by building short positions were forced to exit their positions as the price rose, leading to a self-reinforcing spiral that pushed prices even higher.