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Bitcoin was in demand again after a strong Wednesday after-hours session, which saw it move from $64,000 to briefly touch $70,000 for the first time since June as investors returned to riskier assets.
In early trading on Thursday, the cryptocurrency was changing hands for $69,931.49, up around 1%. The move was part of a broad cryptocurrency rally, with Ether surging 18% above $2,250 in Asian trading. Solana gained more than 10%, XRP rose 10%, and Dogecoin added almost 8%.
The rally accelerated after the US Treasury announced plans to double the size of its longer-dated bond buybacks to $4 billion from $2 billion, a move intended to improve liquidity in the government bond market.
Falling Treasury yields helped ease pressure across financial markets and encouraged investors to move towards riskier assets, including cryptocurrencies.
The upward swing also followed President Donald Trump’s call for Congress to advance the Digital Asset Market Clarity Act, which would establish a regulatory framework for the cryptocurrency industry.
Bitcoin’s advance was amplified by forced buying from traders who had bet on falling prices, with more than $1 billion in short positions liquidated within about an hour during the sharpest part of the move.
Crypto-related shares also rallied, with Coinbase rising 10%, Strategy gaining 13% and Circle increasing 10% as the broader Bitcoin move lifted companies exposed to digital assets.
In early trading on 20 August, Bitcoin held close to $69,000, extending the rally into a second day as traders assessed whether the cryptocurrency could sustain its gains.
The rally marks a reversal from earlier August trading, when concerns over inflation, government borrowing costs and the Federal Reserve’s interest-rate path weighed on demand for volatile assets.
Source: ca.finance.yahoo.com