"Now it's the bears' turn to suffer": Bitcoin has risen above $75,000 for the first time since late May

On the morning of August 21, Bitcoin jumped 4% and rose above $75,000 for the first time since late May, according to CoinDesk and Bloomberg. Over the past week, the cryptocurrency with the largest market capitalization rose 19%, while Ethereum, the second-largest, rose 25%, and XRP rose 28%.

“In February—capitulation [a mass exit of investors from their positions] following a price drop. In June—capitulation due to prolonged uncertainty. But now it’s the bears who are feeling the pain,” wrote analyst James Chek shortly after the leading cryptocurrency broke through the $75,000 mark.

Bitcoin’s rally began on August 19 after the U.S. Treasury Department revealed plans to keep long-term bond yields in check. Optimism was also bolstered by U.S. President Donald Trump’s meeting with representatives of the cryptocurrency industry, including executives from Coinbase Global and Payward. Trump urged the Senate to pass the Clarity Act, a bill regulating the cryptocurrency market that has been stalled due to a dispute over ethical requirements.

However, Matthew Siegel, head of digital asset research at VanEck, does not consider Trump’s remarks to be the main catalyst for the rally. “The market did not react to the U.S. Clarity Act, even though many point to it specifically,” Siegel said. In his view, the move was triggered by actions from the U.S. Treasury Department, which heightened concerns that budgetary needs would begin to dictate monetary policy.

On August 20, U.S. Treasury Secretary Scott Bessent stated that the department plans to regularly purchase long-term government bonds. The volume of these transactions could exceed the previously announced $4 billion, Bessent said.

“We want to show that bond yields do not reflect fundamentals. We have many tools at our disposal,” Bessent told CNBC (as quoted by CoinDesk). At the time of his statement, the yield on 10-year U.S. Treasuries stood at around 4.68 percent: it was still gaining three basis points on the day but had already pulled back from its intraday high, CoinDesk notes.

The publication notes that high yields on U.S. Treasury bonds may draw capital away from risky assets. And buying them back could support bond prices and keep yields in check, easing pressure on Bitcoin.

Mark Connors, Chief Investment Officer at Risk Dimensions, viewed the Treasury Department’s regular repurchase of long-term bonds as an unusual and significant intervention. He expects the department to ramp up its bond purchases due to difficulties in finding buyers for U.S. government debt. While the volume of transactions is currently small, it could eventually grow to $10–30 billion per month, suggested Connors, who has been investing in bonds for many years.

He also allowed for a relaxation of the requirements for banks’ supplementary leverage ratio (SLR). These rules determine the amount of government bonds banks can hold relative to their capital. Revising them would allow financial institutions to purchase more U.S. Treasury securities, Coindesk explains.

The Ministry of Finance’s actions prompted Connors to revise his Bitcoin forecast. He had previously expected the cryptocurrency to remain under pressure until November, as he was basing his outlook on the traditional four-year cycle. Now, the investor is not sure that a new rally will take that long to materialize.

Regarding a possible easing of SLR requirements, Connors said: “When that happens, Bitcoin will start moving toward the $180,000 mark.” His forecast range through 2030 is $180,000–360,000.

Connors views the closing of Bitcoin short positions as merely a short-term factor. CoinDesk notes that a potential change in U.S. liquidity—as indicated by Bessent’s plan—is more important for his forecast.

Connors attributes the short-term risk for Bitcoin to the Clarity ACT. If the bill does not move forward after September 15, the investor anticipates that the cryptocurrency could fall below $72,000.

This article was AI-translated and verified by a human editor