Cryptocurrency-related stocks jumped on Thursday as two developments improved investor sentiment: the U.S. Treasury announced larger purchases of long-term government bonds, while President Donald Trump urged Congress to advance legislation that would establish clearer rules for digital assets.
The Treasury said it would double its buybacks of longer-duration U.S. government debt, increasing the size of each operation to $4 billion. The move followed a sharp selloff in the bond market that had pushed the 30-year Treasury yield to its highest level since 2007. Lower long-term yields can make riskier investments such as stocks and cryptocurrencies more attractive.
The Treasury intervention helped calm bond markets and encouraged investors to return to riskier assets. Long-term Treasury yields fell by as much as about 10 basis points initially, while the dollar weakened and both equities and cryptocurrencies gained. Reuters noted, however, that the Treasury operation is not equivalent to quantitative easing and may have only a limited lasting effect.
Bitcoin and crypto stocks rally
Bitcoin climbed 3.48% to $71,505, moving above $70,000 for the first time since June. Despite the rebound, Bitcoin remained down about 18% for the year and roughly 43% below its record high.
Ether also advanced, gaining 2.46% to $2,272, its highest level in about three months.
Crypto-related companies saw even stronger moves:
- Coinbase: +6.05%
- MicroStrategy: +4%
- Canaan: +10.37%
- Circle: +3.8%
- Robinhood: +0.42%
The rally reflected both the broader improvement in risk appetite and renewed optimism about U.S. cryptocurrency regulation.
Trump pushes the Clarity Act
A second catalyst came from President Trump, who called on Congress to pass the Clarity Act, legislation designed to establish clearer rules for the cryptocurrency industry.
The central issue is determining which digital assets should be treated as securities and which should be treated as commodities, as well as establishing which federal regulators should oversee different parts of the market. The crypto industry has argued that greater regulatory certainty would encourage investment and innovation in the United States.
However, the legislation faces political obstacles. Some lawmakers have expressed concerns about provisions involving politicians and potential personal financial benefits from cryptocurrency. The Senate has not yet moved the bill forward, limiting how quickly the industry can obtain comprehensive legislative clarity.
Why the Treasury move matters
The bond-market development is important because higher Treasury yields can put pressure on virtually all risk assets. Rising yields increase the relative attractiveness of safer fixed-income investments and raise financing costs, potentially reducing demand for speculative assets such as cryptocurrencies.
The Treasury’s larger buybacks provided some relief by supporting demand for longer-term government bonds. That helped push yields lower and temporarily improved market sentiment.
But investors still face significant risks. The Federal Reserve’s latest meeting minutes showed that inflation remains a major concern. Several Fed officials supported higher interest rates at the July meeting, while many others said a rate increase could become necessary if inflation fails to fall toward the central bank’s 2% target.
Bigger picture
The crypto rally therefore has two major drivers:
- Improved market liquidity and risk appetite following the Treasury’s increased bond-buyback operations.
- Renewed optimism over U.S. crypto regulation after Trump’s renewed push for the Clarity Act.
However, the rally does not necessarily mean the underlying risks have disappeared. Inflation remains elevated enough to keep the Federal Reserve considering further rate increases, while concerns about U.S. government debt and long-term Treasury yields continue to weigh on markets.
 Bitcoin’s move back above $70,000 and the sharp gains in crypto stocks show that investors responded positively to the combination of Treasury support for the bond market and Trump’s pro-crypto regulatory push. But the sustainability of the rally will depend heavily on interest rates, inflation, Treasury-market stability and whether Congress actually advances the Clarity Act.
