Bitcoin Surges Past $80,000 on Treasury Buybacks and Short Squeeze

Bitcoin's price surged past $80,000 for the first time since mid-May, capping its biggest three-day rally since 2023. According to Bloomberg, the cryptocurrency rose as much as 2.9% to touch $81,257 before settling around $79,300.

The U.S. Treasury's decision to expand its buybacks of long-dated government debt is widely seen as a key factor behind the rally. The move sent bond yields lower and signaled easing monetary conditions, which analysts say has benefited Bitcoin.

Some analysts attribute the surge to a 'debasement trade', where investors turn towards scarce assets like Bitcoin and gold during periods of expansive policy. A massive short squeeze also contributed to the price increase, as forced liquidations among traders who had bet against Bitcoin amplified its advance.

Institutional demand through spot Bitcoin ETFs has also provided support for the cryptocurrency's price. The funds attracted $1.9 billion to $1.92 billion in net inflows during the week ending Aug. 21, marking their strongest weekly intake since October 2025.