Bitcoin’s Rally Is Picking Up. Treasury Policy and Washington Are Helping Drive the Move
Crypto has spent most of 2026 grinding lower, shedding ground while inflation fears and high bond yields kept risk appetite in check.
Then thanks to an eventful week, the sector erupted. Bitcoin posted its largest three-day rally since 2023, surging more than 20% before extending gains into the following Monday near $79K.
What broke the logjam
The primary catalyst was a surprise move by the US Treasury. It doubled its buyback size for 10- to 30-year Treasury bonds, raising each operation from $2B to $4B.
Lower bond yields push investors out of safer assets and into riskier ones, and crypto was a direct beneficiary. The 30-year Treasury yield had already hit its highest level since 2007 before the intervention, meaning the move was notable even if its size was relatively modest.
The second catalyst was political. President Trump publicly called on Congress to pass the Clarity Act at a White House meeting with crypto executives.
The bill would define whether crypto qualifies as a security or a commodity, resolving a long-running dispute between the SEC and the CFTC over who oversees the sector. Senate Majority Leader John Thune has since scheduled a floor vote for Sept. 15.
Coinbase CEO Brian Armstrong said Thune would not have scheduled this on Sept. 15 if he did not think it would pass.
The third force was mechanical. Weeks of tight trading had built up a large short position in bitcoin. Once prices broke higher, those bets unraveled fast, liquidating more than $4B in bearish crypto positions and adding fuel to the rally.
Wall Street joins crypto's comeback
Spot bitcoin ETFs pulled in $1.92B last week, their biggest weekly haul since bitcoin peaked in October 2025. That suggests the rally had more behind it than short covering, with institutional demand returning too.
Bridgewater founder Ray Dalio also recommended holding some bitcoin as a hedge against a potential debt crisis.
The debasement trade is the framework analysts are using here. A growing US fiscal deficit can weaken the dollar and push investors toward alternative stores of value like crypto and gold. Both gained in the same week, reinforcing that read.
And the rally didn’t stop at bitcoin. Crypto stocks followed it higher. Strategy, Mara Holdings, and Coinbase all gained, while Robinhood Markets, Circle, and Canaan joined the rally.
Hyperliquid Strategies stood out after Trump namechecked the company directly. On the ETH side, Bitmine and Sharplink also gained as ether climbed to its highest level since January.
How to think about staying in
Analysts are split on whether this marks a new leg higher or another rally that fades. BTIG’s Jonathan Krinsky points to January 2023, when bitcoin surged roughly 20% in three days before retreating to its 200-day moving average and finding support. This time could follow the same path.
"It remains premature to call an end to the current crypto correction or the beginning of a climb to new highs."
Andrew Moss, Jefferies
Jefferies analyst Andrew Moss flagged that flows into crypto ETFs were still weak relative to what a genuine bull run typically sees.
Bernstein analysts wrote that bitcoin historically has had a positive reaction to liquidity expansion, pointing to the Treasury move as the cleaner signal.
The Clarity Act vote on Sept. 15 is the next major catalyst that could extend or stall the rally. The bill still faces opposition from Democrats and some Republicans over provisions around officials profiting from crypto, particularly after Trump disclosed more than $1.4B in earnings from his family’s crypto ventures in 2025.