Bitcoin Just Erased More Than $1 Billion in Shorts—But the Real Catalyst Wasn’t Crypto

Bitcoin ripped from roughly $64,100 to the edge of $70,000 on Wednesday, forcing more than $1 billion in bearish crypto bets out of the market in a single hour.

The eye-popping liquidation number will get most of the attention. The more important part of this move, however, came from outside crypto: a sudden change in how the U.S. Treasury plans to support liquidity in the long end of the government-bond market.

In an official announcement from the U.S. Treasury, the department said it will at least double the maximum size of liquidity-support buybacks for nominal securities in the 10-to-20-year and 20-to-30-year sectors. The cap will rise from $2 billion to at least $4 billion per operation beginning September 9 and remain in place through November 4.

Treasury said the larger operations are meant to provide more liquidity support in longer-dated sectors, where market participants have consistently offered far more high-quality debt than the department has been buying back.

The updated buyback schedule has not yet been released, and Treasury said it will provide more information about future operation sizes at the next Quarterly Refunding on November 4. That timeline makes this a defined liquidity measure for the current refunding quarter, not an open-ended promise.

The market still heard a direct message: pressure in long-term government debt had become serious enough for Treasury to increase its support. That mattered to Bitcoin because higher long-term yields raise the return available on government debt and can pull capital away from riskier assets.

CryptoSlate reported that the 30-year Treasury yield fell to about 5.19% after reaching roughly 5.34% a day earlier, its highest level since 2007. The 10-year yield dropped to about 4.647% as well.

Those moves eased one of the biggest sources of pressure on risk assets. Bitcoin responded by climbing from an intraday low near $64,100 to more than $69,000, while Ethereum briefly moved above $2,000 for the first time since June.

The outlet also stressed that Treasury buybacks are not quantitative easing. The Treasury is improving liquidity in existing government securities; the Federal Reserve is not creating reserves, buying assets, or expanding its balance sheet through this operation.

That difference puts the rally in clearer perspective. Traders reacted to easier market conditions and lower long-term yields, but Wednesday’s announcement did not create a new central-bank money spigot.

Bitcoin ripped from ~$64,100 to above $69,500 after the Treasury doubled planned buybacks for long-dated debt, helping pull the 30-year yield down from 5.34% to about 5.19%.

The move triggered more than $1B in crypto liquidations within an hour. The catch: Treasury buybacks…

— CryptoSlate (@CryptoSlate) August 19, 2026

Once Bitcoin started moving, leverage did the rest.

Decrypt reported that Bitcoin reached an intraday high of $69,749 and was recently trading near $68,689. CoinGlass data cited by the outlet showed approximately $1.14 billion in crypto short positions liquidated in one hour, with Bitcoin accounting for about $677.64 million of the damage.

A short seller profits when an asset falls. When Bitcoin rises too far instead, exchanges can forcibly close leveraged short positions before losses exceed the trader’s collateral.

Those forced purchases add fuel to the rally. That can trigger another layer of liquidations and create the self-reinforcing move known as a short squeeze.

Across the previous 24 hours, the same data set counted more than 112,000 traders liquidated. The largest single forced closure was a roughly $32.18 million Ethereum position on Bitget, showing that the squeeze reached well beyond Bitcoin.

Bitcoin Surges Toward $70K as $1.14 Billion in Crypto Shorts Get Rekt in an Hourhttps://t.co/3SCbTeaAwR

— Decrypt (@DecryptMedia) August 19, 2026

Treasury buybacks can improve trading conditions in older government securities, but they are not the same thing as quantitative easing. Treasury is managing its own debt and market liquidity.

The Federal Reserve is not creating reserves to buy securities or expanding its balance sheet through this announcement.

That distinction matters because the first move was partly mechanical. Falling yields relieved pressure on risk assets, Bitcoin jumped, and an overcrowded short trade was forced to unwind.

It does not automatically mean a new flood of central-bank money has arrived.

It does show how tightly Bitcoin is now connected to the plumbing of global capital markets. Long-term yields had been making government bonds more competitive with risk assets. When that pressure eased, even modestly, crypto traders reacted fast.

The squeeze carried Bitcoin to the doorstep of a major psychological level, but $70,000 is not yet a clean breakout.

Decrypt identified roughly $70,284 as the lower edge of the next important resistance zone. A durable close above that area would make the move harder to dismiss as a leverage-driven burst. A slide back below $68,000, by contrast, would put Bitcoin back inside the range that had contained it since June.

For now, the signal is bigger than the liquidation total. Bitcoin remains the world’s largest crypto asset by market value, and Wednesday’s action showed that it can still respond violently when bond-market pressure shifts and too many traders are leaning in the same direction.

The shorts supplied the fuel. Treasury lit the match.

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