U.S. Treasury to Expand Bond Buybacks Sparks Bitcoin Short Squeeze; Over $4B in Shorts Liquidated

ChainThink reported on Aug. 23, citing Fortune, that the U.S. Treasury's decision to expand its long-dated Treasury buyback program helped propel Bitcoin out of a weeks-long $62,000–$67,000 range. Bitcoin surged past $77,000 the same day, notching a weekly gain of more than 20%. The Treasury said it will at least double the size of its long-term buyback program to ease selling pressure in the bond market. With total U.S. national debt now above $40 trillion, and inflation and energy costs still in focus, investors have grown more concerned about the dollar's purchasing power and long-term fiscal stability. That backdrop has supported flows into alternative assets such as Bitcoin and gold. Many traders had positioned for Bitcoin to stall near $67,000. Once that level gave way, short covering accelerated the move, with buy-to-close orders pushing prices higher and setting off additional liquidations. CoinGlass data shows more than $4 billion in crypto short positions were liquidated during the rally. Policy headlines also added fuel. Trump this week urged Congress at a White House cryptocurrency meeting to move forward with the CLARITY Act. CFTC Chairman Mike Selig later said he would use existing authority to advance the government's cryptocurrency policy agenda, giving markets another catalyst.