Bitcoin surged to $70,000 on Wednesday, reaching its highest level in two months as crypto markets rallied on improving liquidity expectations and regulatory developments in the United States.
Ether posted an even stronger move, jumping 20% and reclaiming the $2,200 level for the first time since May.
The rally followed two major developments in Washington: an expansion of the U.S. Treasury's buyback operations for longer-dated securities and the SEC's newly proposed regulatory framework for crypto offerings.
The market move also coincided with a White House meeting between President Donald Trump and several crypto industry executives on Wednesday afternoon.
Treasury Doubles Long-Term Buyback Operations
The U.S. Department of the Treasury announced Wednesday that it will at least double the maximum size of certain liquidity-support buybacks involving longer-dated nominal coupon securities.
The changes cover the 10-to-20-year and 20-to-30-year Treasury sectors.
The current maximum of $2 billion per operation will increase to at least $4 billion, beginning September 9 and continuing through November 4.
Treasury said the expansion reflects its goal of providing greater liquidity support in longer-duration markets, where it has observed consistent demand from market participants.
While the program is not equivalent to traditional quantitative easing, market participants viewed the additional liquidity support as favorable for risk assets.
SEC Proposal Adds to Crypto Optimism
The rally also came one day after the Securities and Exchange Commission proposed “Regulation Crypto Assets” a new framework that could provide tailored exemptions for certain crypto offerings tied to investment contracts.
Under the proposal, issuers could potentially raise up to $5 million over four years or as much as $75 million annually, subject to specific disclosure requirements.
The initiative represents another attempt by the SEC to establish clearer rules for the digital asset industry as comprehensive crypto legislation remains stalled in Congress.
Together with Wednesday's White House meeting involving crypto executives, the proposal helped create a more favorable regulatory backdrop for the market.
Nearly $2 Billion in Positions Liquidated
The rapid price increase caught leveraged traders off guard.
According to CoinGlass data cited in the article, total crypto liquidations reached approximately $1.92 billion over 24 hours, with around $1.7 billion occurring during a four-hour period.
Actual liquidations could ultimately be higher because publicly reported figures may not capture every forced position closure in real time.
The scale of the liquidations suggests that the sharp rally forced a substantial number of leveraged positions out of the market, amplifying the upward move.
Bitcoin Finds Fresh Momentum
Wincent Senior Director Paul Howard linked Bitcoin's renewed strength partly to the Treasury announcement.
He cautioned against interpreting the move as conventional quantitative easing but argued that its liquidity impact could still provide a more supportive environment for speculative assets.
The rally also follows growing speculation that Bitcoin's prolonged correction could be approaching its final stages.
Earlier this week, VanEck reported that eight of its 12 Bitcoin capitulation indicators were flashing, while all 12 had entered their capitulation zones at some point during the previous three months.
Bitcoin Correction Could Be Entering a New Phase
VanEck noted that Bitcoin's previous three bear-market phases took an average of 12.7 months from market peak to maximum drawdown.
Bitcoin is currently around 11 months removed from its October 2025 peak, suggesting that September through November could historically represent a potential transition toward accumulation.
The latest rally does not confirm that the correction is over. However, Bitcoin's return to $69,000, Ether's 10% surge and renewed liquidity optimism have given the crypto market its strongest burst of momentum in weeks.
Whether that momentum develops into a sustained recovery will depend on how markets respond to upcoming U.S. monetary, regulatory and political developments.
