Bitcoin continued its rise on Friday, heading for its best weekly gain in three years, Bloomberg reports, writes UNN.
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As of 9:53 a.m. in London, the price of the original cryptocurrency had risen more than 8%, trading at around $78,500. It has risen approximately 25% this week, and if the gain holds, it will be the biggest weekly increase since March 2023.
Enthusiasm returned to the market when U.S. Treasury Secretary Scott Bessent announced on Wednesday that the department would at least double the volume of its long-term bond buybacks, triggering a rally that forced traders to liquidate billions of dollars in short positions. That same day, U.S. President Donald Trump met with cryptocurrency industry leaders, further boosting optimism.
"The real driver was the U.S. Treasury doubling its long-term bond buybacks, which lowered long-term bond yields and generally increased risk appetite," said Rachel Lucas, an analyst at BTC Markets. "Nothing has changed Bitcoin's long-term outlook, but nothing has changed its volatility either," she pointed out.
Short positions on Bitcoin remain the main factor driving Bitcoin price gains, says Adam Morgan McCarthy, lead researcher at LO:TECH, a London-based digital-asset liquidity and market-data firm. According to Coinglass data, more than $2 billion in bearish Bitcoin bets have been liquidated in the perpetual futures market since August 19.
"Gold is the real macro signal this week: it rose cleanly after the Treasury (U.S.) doubled its bond-buying operations, without any forced buying to inflate Bitcoin's price," McCarthy said. "If you are looking for where investors are actually hedging against currency and inflation risks this week, gold shows it, while Bitcoin does not," he noted.
Trump's meeting, attended by executives from companies such as Coinbase Global Inc. and Payward Inc., was seen as a positive signal regarding the administration's commitment to cryptocurrency. Trump urged the Senate to pass the Clarity Act, a bill establishing the structure of the cryptocurrency market that has stalled over disagreements regarding ethics provisions. The bill was not brought to a vote before the Senate's August recess.
Institutional buyers returned to the market this week, while U.S.-listed spot Bitcoin exchange-traded funds are on track for their largest weekly inflow since January. The 13 ETFs added more than $1 billion this week.
"Trump's crypto meeting, momentum behind the Clarity Act, and positive ETF inflows added to sentiment, but that is not the whole story," Lucas said.
Another sign of life is that large token holders, known as Bitcoin Whales, recently added approximately $2.75 billion worth of the token over 60 days, according to CryptoQuant.
Bitcoin remains well below its peak of more than $126,000, reached last October, which occurred immediately before a sharp sell-off that drove its price down to $58,642 at the end of June.