By Boluwatife Oshadiya| August 21, 2026
Key Points
- Bitcoin climbed above $72,000 after the U.S. Treasury doubled planned long-term bond buybacks
- Citigroup is preparing to launch Bitcoin custody later this year through its new Custody+ platform
- Short-covering and renewed regulatory optimism added momentum to the broader cryptocurrency rally
Main Story
Bitcoin rose sharply to above $72,000 on Thursday as investors responded to a U.S. Treasury buyback expansion, renewed regulatory optimism and growing institutional participation in digital assets.
The U.S. Treasury announced on August 19 that it would double the size of its long-duration bond buyback operations to at least $4 billion, starting September 9. The move followed a sharp rise in long-term Treasury yields and was interpreted by markets as a signal of increased support for bond-market liquidity.
Bitcoin climbed as the decline in long-term yields improved the relative appeal of risk assets. Reuters reported that Bitcoin was up 3.48% at $71,505 after crossing $70,000 for the first time since June, while other crypto-related assets also advanced.
The rally was further supported by short-covering after weeks of narrow trading. Alex Kuptsikevich, chief market analyst at FxPro, said the crypto rally was subsequently fuelled by short-covering following the prolonged period of constrained trading.
U.S. President Donald Trump also urged Congress to pass a “fair version” of the CLARITY Act, which seeks to establish clearer rules around digital assets and define the regulatory responsibilities of the Securities and Exchange Commission and Commodity Futures Trading Commission.
The institutional adoption story received another boost from Citigroup, which announced that its planned digital-asset custody service will launch later this year, initially supporting Bitcoin. The service will operate through Custody+, allowing institutional clients to access traditional and crypto custody within the same framework.
What’s Being Said
“The rally (in crypto) was then fueled by a wave of short-covering, following weeks of extremely narrow trading,” said Alex Kuptsikevich, Chief Market Analyst, FxPro.
“Trump’s comments … are incrementally positive because they suggest the White House is putting more direct pressure on Congress to get the legislation done,” said Bo Pei, Analyst, U.S. Tiger Securities.
Citigroup said its digital-asset custody service will initially focus on Bitcoin and will sit within its broader Custody+ infrastructure.
What’s Next
- U.S. Treasury buybacks are scheduled to increase from September 9, providing a key test of whether the liquidity signal continues to support risk assets
- Investors will monitor progress on the CLARITY Act as Congress considers a framework for digital-asset market regulation
- Citigroup is expected to launch its Bitcoin custody service later in 2026, expanding institutional access to crypto custody
The Bottom Line:
Bitcoin’s latest rally is being supported by three forces at once: easier perceived liquidity conditions, short-covering and stronger institutional and regulatory signals. The combination strengthens the case for continued institutional participation, but the speed of the move leaves the market vulnerable to a reversal if Treasury yields or regulatory expectations change.
