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Key Takeaways
Bitcoin climbed above $71,000, reaching its highest level since early June after gaining more than 10% over two days.
The US Treasury doubled planned long-term bond buybacks from $2 billion to at least $4 billion per operation, pushing the 30-year yield sharply lower.
President Donald Trump called on Congress to pass a version of the CLARITY Act during an Aug. 19 White House meeting with crypto executives and regulators.
The crypto market extended its recovery on Thursday, Aug. 20, with Bitcoin (BTC) breaking above $71,000 as falling Treasury yields and a fresh regulatory push from the White House improved sentiment toward digital assets.
Bitcoin (BTC) reached as high as $71,507, its strongest level since early June, after rising more than 10% over the previous two days. Ethereum (ETH) also joined the move, climbing above $2,270 as the rally spread beyond Bitcoin.
Two developments in Washington are sitting at the center of the move: an unusual intervention in the long end of the US Treasury market and renewed pressure from President Donald Trump to advance crypto market structure legislation.
According to analyst CryptosRus, Ethereum is currently showing stronger momentum than Bitcoin, gaining more over both the past 24 hours and 30 days.
ETH has also held up better than BTC over the past 90 days, with its chart remaining above key trend levels and now pushing toward resistance between $2,334 and $2,391.
A decisive break above that zone could extend Ethereum's relative-strength advantage and add another layer of support to the broader crypto market rally.
The first catalyst came from the US Treasury, which announced that it would at least double the maximum size of liquidity-support buybacks for longer-dated government bonds.
Buybacks in the 10-to-20-year and 20-to-30-year sectors will increase from $2 billion to at least $4 billion per operation between Sept. 9 and Nov. 4.
The Treasury said the move is intended to provide greater liquidity support in parts of the bond market where investor participation has been particularly strong.
The announcement arrived after the 30-year Treasury yield touched 5.337% on Aug. 18, its highest level since 2007.
Following the buyback announcement, the yield fell by almost 10 basis points to 5.187%.
That reversal helped relieve one of the biggest macro pressures facing crypto.
Higher long-term yields make risk-free government debt more attractive relative to assets such as Bitcoin. Falling yields can reverse some of that pressure, particularly when accompanied by a weaker dollar and improving liquidity conditions.
Reuters reported that the Treasury announcement pushed down global bond yields, weakened the dollar, and helped lift stocks, gold, Bitcoin, and Ether.
The buybacks should not, however, be confused with the Federal Reserve's quantitative easing. Treasury is operating an existing liquidity-support program rather than creating new money to purchase assets.
Crypto received a second Washington catalyst hours later.
Trump hosted crypto executives and financial regulators at the White House on Aug. 19 and called on Congress to pass a "fair version" of the CLARITY Act.
Executives from Coinbase, Ripple, Robinhood, Kraken, and Intercontinental Exchange attended alongside federal regulators, according to Reuters.
The legislation is designed to establish clearer boundaries around when digital assets fall under SEC or CFTC oversight.
Its Senate path remains difficult, with disagreements over several provisions still unresolved. Even so, the president's public push for Congress to act gave traders another reason to price in the possibility of a more favorable US regulatory environment.
The SEC has also moved separately. On Aug. 18, the regulator proposed new crypto rules that include exemptions for some token offerings and a conditional safe harbor that could allow qualifying crypto assets to fall outside securities regulation under specified conditions.
The rally has more than one catalyst, giving Bitcoin a stronger foundation than a move driven purely by short covering.
The Treasury's decision to double long-dated bond buybacks pushed the 30-year yield down from 5.337% to around 5.20% and sent the dollar index to a three-month low.
Lower yields and a weaker dollar generally improve conditions for risk assets, including Bitcoin.
Washington is also becoming a bigger part of the bullish narrative. Trump used the Aug. 19 White House meeting to push Congress toward a version of the CLARITY Act, while the SEC is separately moving ahead with a new framework for crypto assets.
Another development worth watching is Hyperliquid and the CFTC's push to bring crypto perpetual markets onshore.
CFTC Chair Mike Selig has previously discussed bringing perpetual futures into the regulated US market, including Hyperliquid in that broader conversation. The CFTC's Innovation Task Force also met with Hyperliquid Labs and Hyperliquid Strategic on July 15.
There are already signs of regulatory infrastructure forming around HYPE. A Hyperliquid US Dollar spot contract was certified by the CFTC in April, while a HYPE perpetual-style futures product was subsequently filed.
That does not mean the Hyperliquid decentralized exchange itself has been approved for US users, but it adds to the evidence that regulators are seeking ways to bring products associated with onchain derivatives into the US regulatory framework.
For Bitcoin, that fits a broader shift from enforcement uncertainty toward regulated crypto market infrastructure.
Still, the macro boost could fade quickly. Reuters noted that the Treasury's $4 billion buybacks are small relative to the roughly $32 trillion Treasury market and do not resolve concerns around deficits, inflation or government borrowing.
Fed officials have also discussed further rate increases if inflation remains stubborn.
So the next leg of the crypto rally may depend on whether Treasury yields remain lower, the dollar stays weak, Washington's crypto policy momentum continues, and Bitcoin can hold its newly reclaimed levels above $70,000.
