Markets Rally on Treasury Buyback Shift; Bitcoin Short Squeeze Tops $1.2 Billion

Market Snapshot

S&P 500 (SPY) — 765.72 (+0.41%) · Nasdaq 100 (QQQ) — 713.44 (+0.35%) · Dow Jones (DIA) — 532.22 (+0.89%) · Gold (GLD) — 423.36 (+1.95%) · Bitcoin (BTC) — 77,298.54 (-0.24%) · Ethereum (ETH) — 2,423.86 (+0.45%) · US Oil (USO) — 134.64 (+0.07%)

Stock Markets

U.S. equities advanced modestly on August 21, recovering from sharp losses in the prior session, according to Reuters. The Dow Jones Industrial Average outperformed with a gain of 0.89%, while the S&P 500 and Nasdaq 100 rose 0.41% and 0.35%, respectively. The session followed a volatile week marked by bond market turbulence, with the 30-year Treasury yield having hit its highest level since 2007 earlier in the week, according to the Wall Street Journal.

Crypto Markets

Crypto markets experienced dramatic volatility over the past 24 hours, driven by a historic short squeeze and renewed institutional flows. Bitcoin briefly surged past $78,000 before settling at $77,298.54, down 0.24% on the day, according to Binance US data. According to CoinMarketCap, over $1.2 billion in Bitcoin short positions were liquidated in 24 hours, forcing cascading buybacks that accelerated the rally. CoinDesk reported that the move represented a roughly 25% gain from $64,000 earlier in the week, triggered in part by expanded Treasury buyback operations that helped lower long-term yields and eased pressure on risk assets.

Institutional demand remained strong. Spot Bitcoin ETFs pulled in $606 million on August 20, while Ethereum ETFs added $221 million, according to CoinDesk. The combined two-day inflow of $800 million confirmed the institutional bid behind the rally. CoinMarketCap reported that Bitcoin ETFs recorded $996 million in net inflows for the week, the strongest weekly total since early January.

Altcoins outperformed. Solana rose 3.05%, driven by strong U.S. spot ETF inflows, a significant speed upgrade on the Solana mainnet, and the broader short-squeeze rally, according to CoinMarketCap. XRP surged 5.58%, supported by the launch of Soil, described as the first compliant real-world asset-backed yield protocol on the XRP Ledger, enabling RLUSD holders to earn fixed on-chain returns. BNB gained 2.68%, while Ethereum advanced 0.45%.

The rally was primarily technical rather than fundamental. CoinDesk noted that Treasury buybacks are not quantitative easing, but the move helped pull long-term yields off 19-year highs and triggered the largest short squeeze on record in a market that had been leaning too bearish. T. Rowe Price entered the crypto ETF market on July 16 with the launch of TKNZ, an actively managed fund holding Bitcoin, Ethereum, BNB, XRP, Solana, and HYPE, with a 0.75% fee through May 2027, according to CoinMarketCap.

Regulatory developments remained in focus. The SEC's website listed ongoing activity related to "Regulation Crypto Assets" and self-regulatory organization filings, though no major announcements were made on August 21. Bloomberg reported that Bitcoin was on track for its biggest weekly gain in more than two years, reflecting the scale of the short-squeeze-driven move.

Markets Rally on Treasury Buyback Shift; Bitcoin Short Squeeze Tops $1.2 Billion

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