Mumbai, August 20: After falling below the $60,000 mark two months ago, encouraging demand from investors has shown Bitcoin rallying toward the $70,000 mark. This surge has come after the US Treasury Department’s unexpected announcement of buying back government bonds to support market liquidity, amid rising expectations of a Federal Reserve rate cut soon.
This development has encouraged investors to reconsider cryptocurrency, as the US government now has to prioritize market liquidity over rising bond yield rates. The surge in interest has also triggered a massive short squeeze, with over $1.9 billion in leveraged short positions being wiped out across crypto market derivatives in just 24 hours.
Following the announcement, more than $1 billion in Bitcoin shorts were closed in about an hour, while another $1.42 billion were closed during the day.
“The first trigger came from the US Treasury, which increased certain long-dated bond buybacks from $2 billion to at least $4 billion per operation from September 9. The second came from traders who had positioned for a decline, with nearly $1.4 billion in crypto short positions liquidated within 4 hours. An 8.2 percent rise driven partly by forced buying can travel quickly, but it still requires fresh investor money to hold,” Vikram Subburaj, CEO of Giottus, a leading cryptocurrency exchange in India, told the media.
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