Bitcoin surged past the $81,000 threshold, lifting its overall market capitalization to nearly $1.62 trillion and narrowing its year-to-date losses to 8%. Data from Bitstamp shows the digital currency peaked at $81,255 before consolidating above $80,500.
The more than 4% price jump followed reports that the U.S. Treasury plans to utilize its General Account to fund bond purchases. Treasury yields dipped following the reports, with the 10-year yield falling over 3 basis points to 4.704% and the 30-year yield dropping more than 4 basis points to 5.234%.
The rapid price movement resulted in significant liquidations for short sellers. According to Coinglass data, bitcoin price action wiped out $177 million in short bets in a four-hour window, contributing to a total of $282 million in bitcoin short liquidations over 24 hours. This accounted for approximately 62% of all liquidated short positions across the wider cryptocurrency market.
Market observers have offered mixed reactions to the Treasury's financial strategies. Some analysts suggest the approach aims to trigger a short squeeze on quantitative strategies shorting U.S. Treasuries. However, prominent investor Stanley F. Druckenmiller criticized the intervention as price management rather than liquidity management, warning that attempting to manipulate bond prices risks the long-term credibility of the U.S. Treasury market.
