Crypto markets surged on Thursday, with Bitcoin (BTC) climbing above $69,000 for the first time since June as investors reacted to a shift in US Treasury policy and a wave of forced short-position liquidations.

The total crypto market capitalization rose 7.8% in 24 hours to $2.45 trillion on August 20, 2026, according to CoinGecko data.

Bitcoin (BTC) gained nearly 8% to trade above $69,500, briefly approaching $70,000 before easing. Ethereum (ETH) jumped 18% to above $2,250, while XRP advanced more than 10% to regain the $1.10 level. Solana (SOL) also rose more than 10%.

The rally followed a US Treasury decision to expand its long-term bond buyback operations, while heavy short-position liquidations amplified the move across crypto markets.

Why the crypto rally accelerated

The main catalyst was the US Treasury's announcement that it will expand long-term bond buybacks from roughly $2 billion to at least $4 billion per operation, beginning in September 2026. The Treasury has conducted regular buyback operations since 2024 as part of efforts to support trading liquidity in the US government bond market, and the latest decision effectively doubles the scale of those operations.

The policy shift pushed long-term bond yields lower and improved risk appetite across markets. Lower long-term yields tend to ease borrowing costs economy-wide, a change investors typically read as supportive for risk assets such as equities and cryptocurrencies.

Those initial gains were then reinforced in crypto derivatives markets by a sharp short squeeze.

About $2.99 billion in crypto positions were liquidated over 24 hours, including roughly $2.74 billion in short positions, according to CoinGlass. Bitcoin and Ether accounted for a large share of the forced closures.

When leveraged short positions are liquidated, exchanges automatically close those trades by buying the underlying asset. That forced buying can intensify a rally, trigger more liquidations, and create a feedback loop.

Bitcoin breaks through a key trading range

Bitcoin's move above $68,000 also broke a level that had held the asset in place for weeks. The cryptocurrency reached around $69,800 on August 19, its highest level since early June.

Crypto-linked stocks also moved higher alongside digital assets. Coinbase, Strategy, and Circle Internet Group each posted double-digit percentage gains on August 19, tracking the broader risk-on move in crypto markets.

Other factors supporting the move

Regulatory developments have added another source of optimism. On August 18, the US Securities and Exchange Commission (SEC) proposed a framework covering certain crypto-related investment contracts. The proposal includes exemptions for some offerings of up to $5 million over four years and up to $75 million during a 12-month period. As with SEC rulemaking generally, the proposal would move through a public comment process before any rules could take effect.

Institutional demand also strengthened earlier in August. US spot Bitcoin ETFs, which launched in January 2024 and gave regulated funds direct exposure to Bitcoin, attracted more than $1 billion during the week ended August 19, marking their strongest weekly inflow since April.

Why this matters

The size and speed of the move highlight how sensitive cryptocurrency markets remain to US monetary and fiscal policy, regulatory developments, and leverage.

The expanded Treasury buybacks are scheduled to begin in September, and the SEC proposal will now work through the standard rulemaking process, giving markets two concrete policy milestones ahead.

Whether the rally continues will depend on whether spot demand, rather than short covering alone, keeps supporting crypto prices.