Treasury's Bond Buybacks Spark Crypto Short Squeeze

The US Treasury's move to double its long-duration bond buyback program sent shockwaves through the crypto market, sparking a violent short squeeze that pushed Bitcoin near $77K.

The decision flooded the financial system with liquidity, weakened the dollar, and made risk assets more attractive. Lower long-term yields also made digital currencies relatively more appealing to investors.

Bitcoin's price surge was accompanied by a significant influx of cash into spot ETFs, which pulled in around $1.6B from Monday through Thursday, their strongest weekly pace this year. This institutional demand suggests that traditional finance allocators saw the Treasury's liquidity signal and moved quickly to add crypto exposure.