Bitcoin climbed back toward $70,000 on Wednesday, finding relief after months of selling pressure. The cryptocurrency jumped nearly 6% to over $69,000, reclaiming a level it had not touched since early June.

The surge followed an announcement by the Treasury Department that it would double purchases of older long-term government bonds. The Treasury has run regular buyback operations since 2024, repurchasing older, less-liquid securities as it issues new debt, and expanding the program drew comparisons to the bond-buying of the quantitative easing era.

“The market read this as a quiet form of quantitative easing, a move that weakens the dollar and sends scarce, debasement-hedge assets like Bitcoin higher,” Matt Mena, a senior strategist at crypto research firm 21Shares, told Fortune in a written statement.

Investors moved quickly into such assets, in turn forcing short sellers to cover roughly $1.5 billion in positions by buying Bitcoin in the market. That included purchases of about $700 million in a single minute — an event that 21Shares said may have amounted to the largest short squeeze in Bitcoin’s history. Such episodes occur when traders who borrowed and sold the asset expecting further declines are forced to buy it back at a loss, a dynamic that amplifies the upward move.

The rally breaks a stretch of weak price action that followed a brutal crash last October. That rout triggered more than $19 billion in liquidations, and Bitcoin has since fallen about 40% from the $115,000 level where it traded at the time, according to CoinGecko, a crypto market data tracker.

Beyond the Treasury announcement, Mena said investors have increasingly priced in a pause in rate hikes over the past two months. U.S. spot Bitcoin ETFs added another source of demand, drawing roughly $1 billion in inflows during the first two weeks of August. The funds, which launched in January 2024 after the SEC ended roughly a decade of rejections, have become a primary channel for institutional exposure to the asset, and their weekly flows are widely tracked as a gauge of demand.

Bitcoin was not the only cryptocurrency to rally after the Treasury announcement. Ethereum and Zcash led major tokens, each rising 9% in the past 24 hours.

A possible bottom

The rally may signal that Bitcoin’s bear market has moved past its worst phase, according to Zach Pandl, Grayscale’s head of research.

“Our best guess is that Bitcoin potentially bottomed at $58,000 earlier this summer… and [that] it’s a compelling time for investors with longer-term horizons to be allocating to Bitcoin and the crypto asset class,” he said.

Pandl said the Treasury’s move highlighted deeper fiscal pressures and could prompt investors to consider alternative stores of value. The national debt is expected to reach $40 trillion before the end of the month, while the U.S. war with Iran has driven inflation higher across the country.

He added that recent favorable developments for the crypto industry may have also influenced Bitcoin’s price performance. On Tuesday, the Securities and Exchange Commission proposed a regulatory framework for crypto assets that could reduce uncertainty while the CLARITY Act remains stalled in Congress. That bill, which would split oversight of digital assets between the SEC and the Commodity Futures Trading Commission, passed the House in July 2025 but has not advanced in the Senate. The SEC proposal would exempt eligible crypto firms from certain federal securities rules and make it easier for them to issue tokens and raise capital.

This story was originally featured on Fortune.com.