Key facts
- Bitcoin surged 8.7% to $69,749 on Wednesday, its steepest rally in five months.
- This marks Bitcoin's highest price since June 1.
- The rally was fueled by a U.S. Treasury plan to double long-bond buybacks.
- Over $1.14 billion in crypto short liquidations occurred within an hour.
- Prediction market sentiment shifted from a 70% bearish lean to a near 50-50 chance.
Bitcoin experienced its sharpest rally in five months on Wednesday, surging as much as 8.7% to an intraday high of $69,749. This significant move marks the steepest one-day gain since March 4 and the highest price the cryptocurrency has reached since June 1.
The rally appears to have been triggered by a U.S. Treasury announcement that it would at least double its long-bond buybacks to $4 billion per operation starting September 9. This action is expected to push down long-end yields and weaken the dollar, typically benefiting risk assets like Bitcoin by loosening financial conditions.
The surge led to substantial short liquidations across the crypto market, with CoinGlass reporting over $1.14 billion wiped out in a single hour, $677.64 million of which was Bitcoin shorts.
Prediction markets reflected the sudden shift in sentiment. On Myriad, odds that had previously favored a bearish decline (around 70-30) flipped to a near coin flip within 24 hours. While year-end market predictions showed less immediate reaction, near-term indicators were caught off guard by the rapid price increase.