Bitcoin and gold both staged dramatic reversals this week after weeks of lackluster performance, with the cryptocurrency posting gains of nearly 24% and the precious metal climbing past $4,600 an ounce as bond market turbulence, Washington policy activity and a cascade of forced short liquidations combined to supercharge both assets.
Bitcoin had spent most of early August range-bound between $63,000 and $64,500 — roughly a third below its January high near $95,000 — as investors kept their distance from speculative assets and crypto advocates grew frustrated by the lack of movement on industry regulation. That changed abruptly this week. By Friday, Bitcoin had surged to near $77,000, its highest level since late May, triggering more than $4 billion in bearish positions being forcibly liquidated, according to CoinGlass. The mechanics compounded the move: as shorts were squeezed out, their forced buying added fuel to the rally, which in turn triggered more liquidations.
U.S. spot Bitcoin ETFs recorded more than $1 billion in net inflows for the week, providing additional momentum as both institutional and retail investors added exposure through traditional brokerage accounts. Options positioning leaned bullish heading into a large expiry on Friday, with calls making up roughly 60% of open interest.
Gold moved in parallel, climbing from just above $4,200 at the start of the week to between $4,600 and $4,618 an ounce by Thursday and Friday — monthly gains of 10% to 11% — driven by persistent inflation fears, geopolitical tensions tied to the Strait of Hormuz and expectations that the Federal Reserve under Chairman Kevin Warsh will hold rates higher for longer. China’s continued robust physical demand for the metal added buying pressure throughout the week.
The common thread between the two assets was the bond market. Treasury Secretary Scott Bessent announced a program to expand buybacks of outstanding longer-dated government bonds, which initially eased some pressure on yields. But the relief proved short-lived as investors remained focused on the structural forces driving yields higher — including widening deficits and oil-price inflation linked to ongoing Iran tensions. The 30-year Treasury yield ended the week at 5.273%, keeping the pressure on traditional fixed-income investments and making both gold and Bitcoin more attractive by comparison.
The week’s rally left Bitcoin still well below its all-time high and well off January’s peak, but the sharp reversal from a prolonged slump raised fresh questions about whether the long-anticipated next leg higher may finally be taking shape — or whether this week’s move was primarily a technical squeeze in search of a more durable catalyst.