TLDR
- Bitcoin broke $81,000, pushing its market cap near $1.62 trillion.
- The rally wiped out $282 million in short positions, 62% of all crypto shorts liquidated that day.
- Reports of a $950 billion Treasury bond buyback plan helped push yields lower.
- Analyst Kip Herriage said the move could squeeze short sellers in Treasuries.
- Stanley Druckenmiller criticized the Treasury’s bond buybacks as price manipulation.
Bitcoin broke through $81,000 on August 24, marking one of its strongest moves of 2026.
The price peaked at $81,255 at 10:45 p.m. EST before settling above $80,500. That pushed bitcoin’s market cap to nearly $1.62 trillion.
The token climbed more than 4% in 24 hours. Over the past week and two weeks, gains topped 25%.
The rally also cut bitcoin’s year-to-date losses to 8%, down from 9.5% less than half a day earlier.
Short Sellers Take a Hit
Traders betting against bitcoin faced heavy losses. Coinglass data shows $282 million in short positions were wiped out over 24 hours.
That accounted for 62% of all short liquidations across the crypto market that day.
In just four hours, $177 million in shorts were liquidated, compared with $4.5 million in long positions.
The volatility isn’t new. On August 22, the wider crypto market lost $550 million in liquidations within a single hour.
Treasury Moves Fuel the Rally
Reports say the US Treasury may use its $950 billion General Account to fund bond buybacks. That news helped push yields lower.
The 10-year Treasury yield fell to 4.704%. The 30-year yield dropped to 5.234%, pulling back from last week’s multi-decade high.
On August 19, the Treasury said it would double bond buybacks from $2 billion to at least $4 billion per operation.
Kip Herriage, founder of Vertical Research Advisory, wrote on X that a squeeze on funds shorting Treasuries could “send bond prices soaring and interest rates plummeting.” He argued the Treasury’s moves were designed to force those short positions to close.
Investor Stanley Druckenmiller pushed back on the Treasury’s approach. He called it “price management” rather than liquidity management.
Druckenmiller said official intervention should only happen during serious market breakdowns, like those seen in March 2020 or September 2022.
Other events added to the rally too. President Trump held a crypto event at the White House last week and said the US plans to buy large amounts of bitcoin and other digital assets.
BlackRock’s IBIT bitcoin ETF has purchased more than $1 billion in BTC since August 17, according to Farside Investors data.
US inflation remains above the Federal Reserve’s 2% target, though it has been cooling in recent months.
