Bitcoin rises 9% to $79,455 as Treasury buybacks, ETF inflows converge

Bitcoin's sharpest rally in three months was driven by a convergence of institutional ETF buying, Treasury buyback expansion and short covering.

Bitcoin rose more than 9% to peak at $79,455 on Friday, its highest level since late May, as institutional demand and Treasury buyback expansion converged.

"A jump in institutional spot demand, coupled with rising expectations of lower Treasury yields and forced buying from certain traders to close their losing bets have triggered the rally," Naeem Aslam, chief market analyst at Zaye Capital Markets, said.

U.S. spot bitcoin products attracted almost $520 million in net inflows on Wednesday, the largest daily inflow in about three and a half months, according to Zaye Capital. Weekly ETF inflows reached $1.92 billion, the biggest since October 2025, with BlackRock's IBIT alone drawing $503 million on Thursday. The rally was supported by the U.S. Treasury's announcement Wednesday that it will raise purchases of longer-term securities to at least $4 billion per operation from $2 billion, said David Morrison, senior market analyst at Trade Nation.

Bitcoin last traded at $76,679 after being rejected at $79,500, with roughly $1.8 billion in leveraged positions liquidated across more than 286,000 traders in 24 hours. The $75,000 level now serves as support, while traders eye the $80,000 resistance where billions of dollars in shorts remain open.

Treasury Buybacks Weaken the Dollar

The Treasury's expanded buyback program was a key trigger. "Gold and bitcoin immediately grasped this message and rallied in tandem," said Dominic Weibel, head of research at Bitcoin Suisse. "While Bessent sought to calm the bond market, he may instead have fired the starting gun for the next leg of the 'hard money' trade."

The DXY dollar index fell 0.2% to 98.798, staying just shy of Thursday's three-month low of 98.557. Gold rose 1.5% to $4,585 a troy ounce, while silver gained 2.1% to $69.48. The dollar weakness is pushing bitcoin higher as investors increasingly view the cryptocurrency as a dollar hedge, said Matthew Sigel, head of digital assets research at VanEck.

U.S. federal debt pushed above $40 trillion earlier this week, adding to concerns that higher debt-servicing costs could pressure the dollar and force policymakers toward looser monetary policy, Sigel added.

Clarity Act Progress Lowers Regulatory Risk

President Trump's call for lawmakers to pass a "fair version" of the proposed Clarity Act regulating digital assets, currently under consideration in Congress, shows the U.S. government is open to accumulating additional bitcoin and other digital assets if regulators approve, Aslam said.

"[The Trump administration's stance] materially changes the regulatory risk premium surrounding bitcoin because clearer rules can make banks, asset managers and corporations more comfortable allocating capital to the sector," he said.

Traders are also reassessing the broader macro environment. Thursday's U.S. economic data — falling jobless claims, stronger manufacturing activity and a stable outlook for business inflation — point to resilient growth without a fresh inflation surge. "For bitcoin, that macro mix is important because it supports the possibility of easing financial conditions without signaling an outright economic downturn," Zaye Capital Markets said.

"Corporate and economic growth are strong by most measures, but the inflation and rates overhang is real, and companies will have to reassess how they grow in a sustained higher-rate environment," said Jeffrey O'Connor, U.S. head of market structure and sell side ATS strategy at Liquidnet.

Above $80,000, many billions of dollars in shorts remain open, providing fuel for further upside if the ETF bid chews through the resistance wall at $79,500. Some traders warn against retail FOMO, preferring to wait for deeper corrections, but institutions are "not waiting," with one ETF issuer reporting all-time high bitcoin under management.

This article is for informational purposes only and does not constitute investment advice.