Bitcoin's Best Week Since 2023: $79K, a Bond Buyback, and What It Means If You Spend BTC

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Yesterday we wrote about Bitcoin jumping 12% past $71,000. That article is already stale.

Bitcoin climbed as high as $79,400 on Friday and was trading just below $78,000 mid-morning, according to CoinDesk. That's five straight up days and roughly 24% since Monday morning — the strongest weekly advance since March 2023.

The strange part is what caused it. This rally didn't start with an ETF approval, a halving, or a corporate treasury announcement. It started with a technical adjustment to how the U.S. Treasury buys back its own bonds. Here's the chain, and what it actually changes for anyone holding or spending BTC.

What the Treasury actually did

On Wednesday, the Treasury Department announced it would at least double the maximum size of its liquidity-support buybacks for longer-dated government bonds — from $2 billion to at least $4 billion per operation, effective September 9 and running through the November 4 refunding quarter. The operations cover 10-to-20-year and 20-to-30-year securities.

Treasury Secretary Scott Bessent then told CNBC the number could go higher still, saying the department is "going to increase the size of the buyback" and that it "could be more than the $4 billion per issue."

That is not quantitative easing. The Treasury isn't printing money or expanding the Fed's balance sheet. It's buying back off-the-run bonds — older, less liquid issues — to improve trading conditions at the long end of the curve. CoinDesk ran a separate explainer making exactly this point: it isn't QE, and it isn't yield curve control.

But the market didn't care about the label. It cared about the effect.

Why a bond operation moved Bitcoin

The 30-year Treasury yield had touched 5.337% on Tuesday — its highest level since 2007 — before falling back to 5.189% after the announcement, per Forbes.

Falling long-end yields and a softening dollar (the Dollar Index sat at 98.77, off its August highs) improve conditions for risk assets generally. Bitcoin, which has spent most of 2026 trading like a leveraged tech stock rather than digital gold, is about as risk-on as an asset gets.

Then leverage did the rest.

The squeeze was the accelerant

The size of this move has more to do with positioning than conviction. Traders were heavily short into it, and they got run over.

Per CoinGlass data cited by CoinDesk:

• $3.3 billion in derivatives positions were liquidated on Wednesday alone

• A further $1.25 billion was wiped out in the following 24 hours

• Shorts accounted for $1.06 billion of that $1.25B, against just $178 million of longs

• 152,586 traders were liquidated in total

• The single largest order was a $23.59 million BTC-USD position on Hyperliquid

Here's the detail that should temper anyone's excitement: the aggregated long-short accounts ratio for Bitcoin still sits at 0.865, meaning more accounts remain positioned short than long. Traders have spent four days fading this move and been wrong each time.

Open interest, meanwhile, climbed 6.17% to $139.37 billion across the market, with BTC futures OI up 7.38% to $57.7 billion. Predicted funding rates hit 0.013%, the highest since January.

Translation: leverage is being rebuilt aggressively at higher prices. That cuts both ways.

The ETF bid came back too

Spot Bitcoin ETFs, which spent most of this year bleeding, turned. U.S. spot Bitcoin ETFs took in $517 million on August 19, the largest daily inflow since May 4, according to The Block. BlackRock's IBIT led with $284.7 million. Bitcoin and ether ETFs then pulled in a combined $800 million as inflows surged for a second day.

August is now running at roughly $1.5 billion net inflow across 13 trading days — nine of inflows against four of outflows.

Washington added fuel

Three things landed inside a week:

1. August 18 — the SEC proposed its Regulation Crypto Assets framework.

2. August 19 — President Trump convened crypto executives and regulators at the White House and urged the Senate to pass the CLARITY Act, while hinting the government may buy more Bitcoin.

3. August 20 — CFTC Chair Michael Selig put his staff on notice to draft crypto market structure rules using the agency's existing authority if the CLARITY Act fails in the Senate.

We'd flag the last one carefully. Selig's fallback is real but narrower than the headline suggests: the CFTC's existing jurisdiction covers commodity derivatives, not spot markets. Rules built on current authority can create a designated "crypto asset market" category for leveraged and margined trading, but they cannot hand the agency the routine supervisory power over spot exchanges that only Congress can grant. And agency rulemaking is more vulnerable to court challenge and reversal than legislation.

The Senate vote is expected in September and needs 60 votes. Galaxy Research cut its estimated odds of CLARITY passing to 10% on August 14, down from 30% in late July and 60% after the May Senate Banking markup. Nothing this week changed that arithmetic — Trump asking is not the same as Democrats agreeing, and the ethics provisions tied to the Trump family's holdings remain the sticking point.

What this means if you actually spend Bitcoin

This is where BitDeals readers should pay attention, because the spending math changed twice this week.

Your BTC buys more. On Monday morning, 0.01 BTC was worth roughly $629. At $78,000, the same 0.01 BTC covers about $780 — a $151 increase in purchasing power on a fraction of a coin, in five days.

And your tax bill on spending it just got bigger. In the U.S., spending Bitcoin is a disposal. You realize capital gain or loss measured against your cost basis, exactly as if you'd sold. If you acquired that 0.01 BTC at a $40,000 basis, spending it Monday realized about $229 of gain. Spending it today realizes about $380. Same purchase, 66% more taxable gain.

That's not an argument against spending. It's an argument for knowing which coins you're spending. If you hold BTC acquired at multiple price points and your wallet or exchange supports specific identification, the lot you choose materially changes what you owe. We covered the mechanics in our guide to whether spending Bitcoin is taxed.

Lock the fiat price before you commit. In a week where the asset moved 24%, the gap between quoting a price and settling a transaction matters. Payment processors like BitPay and Bitrefill lock a rate for a short window — use it, and finish the checkout inside it.

A 24% week is a lousy time to be casual about custody. Rallies bring phishing. Every prior surge has been followed by a wave of fake wallet apps, fake support accounts, and "verify your seed phrase" emails. If your stack has grown meaningfully this week and it's sitting on an exchange, that's worth fixing. A hardware wallet is the boring answer — Ledger's store is the direct source, and we published a BitBox02 review yesterday plus a Jade Plus review today if you want alternatives.

The honest caveats

We're not going to pretend this is a clean bull signal.

Bitcoin is still roughly 37% below its October 2025 all-time high of $126,198.07. A 24% week does not erase that.

CoinDesk notes Bitcoin has now passed the $76,000 level implied by the inverse head-and-shoulders pattern that had been forming since the June lows — meaning traders who bought that breakout have hit their target, which is often when short-term pullbacks arrive. The RSI is in overbought territory.

CryptoQuant's 30-day apparent spot demand has recovered from minus 206,000 BTC on July 23 to roughly minus 5,000, putting it on the cusp of turning positive for the first time since February 26. The firm itself cautions that the sample is small and the signal hasn't completed. We'd add: a metric that has to cross zero before it means anything hasn't crossed zero.

And the thing that started all of this — the buyback expansion — doesn't take effect until September 9. Markets have priced the announcement. The operations themselves haven't happened.

We don't make price predictions, and nothing here is investment advice. What we can say plainly: this move was driven by a liquidity mechanism, amplified by forced short covering, and supported by ETF flows that have been unreliable all year. Whether it holds depends on whether the spot bid outlasts the squeeze.

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Sources: CoinDesk — Bitcoin tops $77,000; CoinDesk — Treasury's latest measure isn't QE or YCC; CoinDesk — ETF live updates; CoinDesk — CFTC chief puts staff on notice; U.S. Treasury press release SB0607; Forbes — Bitcoin approaches $70,000 after Treasury buyback expansion; Forbes — Bitcoin soars above $70,000 after Trump calls for CLARITY passage; The Block — $517 million in net inflows; CoinGlass; CryptoQuant research.