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Saturday, Oct 24, 2026

Bitcoin Surges Toward $80,000 as Short Squeeze and ETF Inflows Ignite Crypto Rally

Bitcoin touched $79,463 after a roughly 23% seven-day advance, while more than $4 billion in short positions were liquidated and U.S. spot Bitcoin ETFs drew about $1.6 billion through Thursday.
Bitcoin surged to within a few hundred dollars of $80,000 on Friday, reaching a three-month high of $79,463 as one of the cryptocurrency market's strongest rallies in years accelerated.

The world's largest digital asset was recently trading around $77,000 to $78,000, up nearly 8% over 24 hours and roughly 23% over seven days.

Bitcoin opened Monday near $62,830, meaning the rise from Monday's opening level to Friday's intraday peak was more than 26%; the precise weekly percentage varies with the starting time used.

The advance has put Bitcoin on course for its strongest week in more than two years.

The rally spread across the wider crypto market.

Ether climbed to around $2,400, approximately 5% higher over 24 hours, while XRP traded near $1.38 after a gain of about 20% and Solana rose roughly 5% to around $91. The Solana price in the original account, about $85, was already outdated as the market continued higher.

A violent short squeeze provided much of the rally's acceleration.

Liquidation data show more than $4 billion of leveraged short positions were forced closed across roughly two days, although totals vary depending on the rolling time window used by data providers.

One major wave erased about $2.75 billion of crypto-market shorts, followed by roughly $1.2 billion of short liquidations during the next 24-hour period.

The later period involved about $1.5 billion in total liquidations across nearly 179,000 traders.

The mechanics matter.

A short liquidation occurs when losses on a leveraged bearish position exhaust enough of the trader's collateral that the exchange automatically closes the trade.

In futures and perpetual-contract markets, that normally requires buy-to-close orders in the derivatives market.

Those forced purchases can push prices higher, trigger additional liquidations and transmit into spot markets through arbitrage and hedging.

It is therefore more accurate than saying exchanges necessarily buy the underlying cryptocurrency directly on the open spot market every time a short is liquidated.

The rally is not being driven by liquidations alone.

U.S.-listed spot Bitcoin exchange-traded funds recorded approximately $1.61 billion of net inflows from Monday through Thursday.

Thursday contributed about $606 million, following roughly $517 million on Wednesday, $189 million on Tuesday and $298 million on Monday.

That four-day sequence indicates that fresh investment demand was arriving alongside the forced covering of bearish derivatives positions, making the advance broader than a purely mechanical short squeeze.

Washington supplied another important catalyst.

On August 19, the U.S. Treasury announced that it would at least double the maximum size of its liquidity-support buybacks for longer-dated Treasury securities, from $2 billion to at least $4 billion per operation.

The increase applies to nominal securities in the 10-to-20-year and 20-to-30-year sectors and is scheduled to take effect on September 9. The announcement initially pulled long-term yields lower and weakened the dollar, conditions that supported Bitcoin and other risk-sensitive assets.

The measure is a Treasury debt-management and market-liquidity operation, however, not a Federal Reserve interest-rate cut or a general monetary-easing program.

Crypto investors also responded to a rapid series of regulatory developments.

President Donald Trump used an August 19 White House gathering with executives from companies including Coinbase, Ripple, Kraken, Robinhood and Gemini, along with senior financial regulators, to urge Congress to pass what he called a fair version of the Clarity Act.

The legislation is intended to establish a clearer federal market structure for digital assets and address the division of regulatory responsibility between agencies.

The House passed its version by 294 votes to 134 in July 2025, but the legislation remains unresolved in the Senate, where a procedural test is expected on September 15. Its passage is therefore not assured.

Separately, the Securities and Exchange Commission proposed Regulation Crypto Assets on August 18. The proposal would create a startup exemption for qualifying offerings of up to $5 million over four years, a fundraising exemption allowing as much as $75 million during a 12-month period under specified disclosure requirements, and a conditional safe harbor addressing when a crypto asset is no longer tied to an investment contract.

The proposals reinforce the perception of a more accommodating U.S. regulatory environment, but they remain proposed rules rather than final law and are subject to a public-comment and rulemaking process.

The rebound has also transformed the position of Strategy, the publicly traded company formerly known as MicroStrategy and the largest corporate holder of Bitcoin.

Strategy reported 840,447 Bitcoin as of August 16, acquired for an aggregate $63.36 billion at an average cost of $75,385 per coin.

At Bitcoin prices around $77,000, that holding was roughly $1.4 billion above its acquisition cost; around $77,800 the surplus approaches $2 billion, and at Friday's $79,463 intraday peak it was about $3.4 billion above cost.

That illustrates how quickly estimates of Strategy's paper profit change with Bitcoin's price.

The turnaround is substantial.

Around the end of June and beginning of July, when Bitcoin was trading near $59,000, the market value of Strategy's holdings was more than $13 billion below their acquisition cost.

Strategy separately reported an $8.31 billion unrealized digital-asset accounting loss for the second quarter, a different measure that should not be confused with the instantaneous gap between the market value and aggregate purchase cost of its Bitcoin holdings.

Strategy's common shares have rebounded with Bitcoin.

MSTR closed Thursday at $112.39 after trading in the low $90s earlier in the week and rose roughly 6% to 8% in Friday morning trading, reaching around $119 to $120 after an even stronger premarket move.

The company has meanwhile been concentrating on its balance sheet rather than simply adding more Bitcoin.

It made no Bitcoin purchase or sale during the week ended August 16, sold $333.7 million of common stock, spent $132.2 million repurchasing its STRC preferred shares, used $52.4 million for preferred dividends and added $149.1 million to its dollar reserve.

That reserve reached approximately $4.8 billion.

Strategy has spent about $347 million repurchasing STRC under a program intended to support the preferred shares as they move toward their $100 stated value.

The company's recent financing actions are significant because they show that the Bitcoin rally is relieving pressure on a balance sheet that had been strained during the cryptocurrency's decline, even as Strategy has shifted from relentless Bitcoin accumulation toward a broader capital-management approach.

Despite the scale of this week's rebound, Bitcoin remains far below its record above $126,000 reached in October 2025, so the move represents a powerful recovery rather than a return to an all-time high.

The next confirmed policy milestones are now clearly defined: the Treasury's larger long-dated bond buybacks are due to begin on September 9, the Senate is expected to hold its first procedural test of the Clarity legislation on September 15, and the SEC's proposed crypto framework will proceed through its public-comment process.

Those developments will help determine whether the forces behind this week's rally extend beyond the short squeeze that helped propel Bitcoin back toward $80,000.
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