- Bitcoin climbed to $79,500 on August 21, its highest since May, fueled by a U.S. Treasury buyback announcement and strong ETF inflows.
- Analysts cite a “liquidity story” as the rally wiped out billions in short positions and attracted $1.6 billion in spot ETF inflows.
- Regulatory clarity and a weaker dollar are also driving institutional investors into Bitcoin, according to market experts.
Bitcoin prices surged to $79,500 on Friday, August 21, reaching their highest valuation since May, according to Coinbase data from TradingView. The world’s most well-known digital currency climbed nearly 9% from its intraday low of roughly $73,000 and 24% from Wednesday’s low of $64,100.
The rally began after the U.S. Treasury announced it would increase buyback operations for long-term bonds to support liquidity. Analysts now emphasize strong inflows into Bitcoin-based exchange-traded funds and the liquidation of short positions as the rally gains momentum.
“Honestly, at this point it’s feeding on itself,” said William Stern, founder of Cardiff, via email. “The buyback and the Clarity Act got it moving, but now every leg up is wiping out more shorts, and those liquidations are what’s pushing it into the $79,000s.”
Terence McMenamin, CEO and cofounder of Techdollar, called the move a liquidity story rather than a crypto story. “Bitcoin is up more than 20% this week, spot ETFs have pulled in roughly $1.6 billion, and billions of dollars of short positions have been forced out of the market,” he noted.
“The bigger catalyst is the shift in the macro backdrop. The Treasury’s decision to increase long-duration bond buybacks has eased pressure in the bond market and weakened the dollar,” McMenamin added. “Bitcoin is benefiting from more liquidity and less perceived regulatory risk.”
Brian Huang, cofounder of Glider, focused on the Treasury announcement’s ongoing impact. “When the US government buys long-dated treasuries to artificially dampen rates, it pushes investors towards assets like BTC and Gold,” he said.
Thomas Perfumo, global economist for Kraken, emphasized that while the Treasury announcement served as the original catalyst, he has been watching ETF inflows for follow-through. “Over the last couple of days, we’ve seen Bitcoin ETFs post net inflows that make the top-10 best days for net flows in 2026,” he noted.
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