{"id":5848,"date":"2026-08-23T19:38:58","date_gmt":"2026-08-23T19:38:58","guid":{"rendered":"https:\/\/crosscountrymovingteams.com\/?p=5848"},"modified":"2026-08-23T19:38:58","modified_gmt":"2026-08-23T19:38:58","slug":"traders-bet-bitcoin-was-stuck-below-67000-the-treasury-blew-that-trade-up-in-one-afternoon","status":"publish","type":"post","link":"https:\/\/crosscountrymovingteams.com\/?p=5848","title":{"rendered":"Traders bet bitcoin was stuck below $67,000. The Treasury blew that trade up in one afternoon"},"content":{"rendered":"
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Bitcoin had dropped from a January high of around $95,000 to below $60,000 at the end of June. Investors shied away from speculative assets earlier in the year and crypto supporters were concerned about the lack of movement on proposed regulation of the industry. On Friday, bitcoin rose above $77,000.<\/p>\n

Read more The tax escape map: Billionaires are bolting for Florida from the West Coast and taking some $29 billion in tax revenue with them<\/a><\/p>\n

Gold hit a high above $5,300 in January but dropped to around $4,000 in June as rising rates made interest-bearing investments more attractive. Gold rose to $4,661 on Friday.<\/p>\n

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The first jolt arrived Wednesday when the Treasury Department announced plans to significantly increase\u00a0its buybacks of long-term Treasurys, or government debt. On the same day, President Donald Trump, who\u00a0made about $1.2 billion last year\u00a0from various crypto holdings, urged Congress to move quickly on crypto legislation.<\/p>\n

There was an almost immediate reaction, which included a dollar sell-off and a jump in the value of gold and bitcoin as investors moved toward alternative assets.<\/p>\n

How these two investments caught fire can be understood in the context of several developments this week.<\/p>\n

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The Treasury stepped into the bond market \u2014 forcefully<\/h4>\n

In a surprise announcement Wednesday, the U.S. Treasury Department said that it would at least\u00a0double the size\u00a0of its planned purchases of longer-term government debt. The maneuver was intended to calm bond markets after a sustained sell-off, meaning investors were asking for higher yields to lend money to the U.S., which investors suddenly viewed as riskier<\/p>\n

That\u2019s because while the Treasury intervention worked, at least for a short period, it also raised questions about whether the government is trying to push borrowing costs lower despite inflationary pressures. Treasury Secretary Scott Bessent is attempting to lower long-term borrowing costs, a move that can put upward pressure on inflation at a time when inflation is already elevated. Bessent\u2019s maneuver could handcuff the Federal Reserve, which fights inflation by raising interest rates.<\/p>\n

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Debt, inflation, and the \u201cdebasement trade\u201d heat up<\/h4>\n

Then there\u2019s the\u00a0national debt, which surpassed a record $40 trillion on the same day that the Treasury\u2019s actions unfolded. The milestone figure was recorded just five months after the U.S.\u00a0hit a record $39 trillion debt\u00a0in March. It\u00a0reached $38 trillion\u00a0five months before that, in October.<\/p>\n

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There is already a lot of anxiety over inflation, particularly because of the\u00a0conflict in Iran\u00a0and\u00a0soaring energy prices. If yields on U.S. bonds are not truly reflecting risk, you can often see that play out in the value of the U.S. currency, which took a significant downward swoop Wednesday.<\/p>\n

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So where does the money that was invested in the dollar or Treasurys go? This week, it appears to have been funneled into what is known as the \u201cdebasement trade,\u201d when investors flood into alternative assets such as gold, which rose more than 2% Wednesday. The debasement trade now includes bitcoin. Bitcoin jumped more than 20% this week.<\/p>\n

Crypto had a very good week in Washington<\/h4>\n

On Wednesday, President Donald Trump,\u00a0who banked\u00a0nearly $1.2 billion from his crypto businesses last year, held a crypto currency conference at the White House where he called on Congress to pass the crypto-friendly Clarity Act, saying that it would \u201ckeep us ahead of China, keep us ahead of everyone else.\u201d<\/p>\n

Read more Japan\u2019s PM is barely sleeping and rarely leaving her office in the name of \u2018efficiency.\u2019 Her approval rating disagrees<\/a><\/p>\n

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Trump then yielded the floor to Commodity Futures Trading Commission Chair Mike Selig, who vowed to \u201cuse every tool available\u201d to advance Trump\u2019s agenda.<\/p>\n

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Selig\u2019s comments came ahead of a CFTC meeting Thursday examining ways the agency can use its existing authority to ease crypto rules. A day earlier, other regulators proposed rules making it easier for crypto companies and projects to raise money from the public.<\/p>\n

Since taking office, Trump has pushed policies friendly to the crypto industry and reversed a Biden administration regulatory crackdown.<\/p>\n

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Bitcoin\u2019s big squeeze sent prices even higher<\/h4>\n

Bitcoin can sometimes get a bump when the U.S. dollar is on the ropes as investors try to unload the U.S. currency. But you don\u2019t typically see the kind of related movement that was observed with bitcoin this week.<\/p>\n

The price of bitcoin had been stuck between $62,000 and $67,000 for weeks. Investors seized on that weakness, many placing bets that the cryptocurrency would be stuck in that range for some time to come.<\/p>\n

However, on the day the Treasury announced its buybacks, Treasury yields fell, as did the dollar, and bitcoin blasted through that upper level of $67,000.<\/p>\n

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The Treasury\u2019s actions negatively affected the money investors could make on U.S. bonds and the dollar, and boosted the value of bitcoin. That meant that many investors who had shorted bitcoin, or bet that its price would remain subdued, were forced to close their positions as bitcoin surged. Closing those bearish positions required buying back the digital asset, adding even more upward pressure to bitcoin\u2019s price.<\/p>\n

By Friday, more than $4 billion in bearish crypto positions had been liquidated during the rally, according to CoinGlass, which tracks cryptocurrency derivatives markets.<\/p>\n

And because bitcoin was already rising, those forced purchases added fuel to the rally, potentially triggering still more liquidations as prices climbed.<\/p>\n

Read more Burry says he sold Alibaba, calling it pricey before share sale<\/a><\/p>\n

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A surprise bond buyback triggered a squeeze that liquidated over $4 billion in bearish crypto bets and sent bitcoin past $77,000.<\/p>\n","protected":false},"author":1,"featured_media":5847,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[363],"tags":[],"class_list":["post-5848","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bitcoin"],"yoast_head":"\nTraders bet bitcoin was stuck below $67,000. 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