Bitcoin surges over 25% as shorts get squeezed and Washington leans into crypto

Key Points:

• Bitcoin reached an intraday high of $79,500 on Friday, marking its best level in months and a gain of over 25% since Monday, following a period of stagnation between $62,000 and $66,000 for six weeks.
• The recent rally was driven by forced short covering as bearish traders unwound positions, alongside broader momentum in cryptocurrencies like Ether, supported by signals of increased liquidity from US Treasury bond buybacks.
• Regulatory developments boosted market sentiment, including the SEC's proposal for lighter registration requirements for crypto issuers and a White House summit promoting the Digital Asset Market CLARITY Act, which aims to clarify oversight between the SEC and CFTC.
• President Donald Trump's remarks about bringing Hyperliquid, a decentralized derivatives exchange, onshore in a compliant manner led to a 25% surge in the value of HYPE, Hyperliquid's native token, reflecting optimism about Washington's evolving stance on crypto.
• Despite positive momentum, the Digital Asset Market CLARITY Act still faces uncertainty in the Senate, needing 60 votes to overcome a procedural hurdle on 15 September.