Washington crypto shift sends Bitcoin above $78,000 mark

Bitcoin rose more than 24% to above $78,000 this week, its strongest weekly gain since March 2024. Short liquidations deepened the move.

The advance unfolded after US regulators and lawmakers outlined paths that could make token issuance and crypto trading easier to conduct inside the country. The clearest strain appeared in derivatives, where traders who had wagered on lower prices had to close losing positions as the market moved against them.

SEC opens token path

On August 18, the Securities and Exchange Commission proposed exemptions that would reduce the compliance burden for some crypto projects selling tokens to the public. Under current rules, public token sales can require financial disclosures, legal filings and continuing reports similar to those used in securities offerings.

The proposal would let smaller projects raise limited sums with simpler disclosures than the current regime requires. Larger projects could raise up to $75 million a year under lighter requirements, giving token issuers a defined fundraising route short of a full securities-style process.

The SEC also set out a path for some tokens to stop being treated as securities once they no longer depend on the original company or development team. The proposal enters a 60-day public comment period before the agency decides whether to adopt the rules.

If the exemptions survive in broad form, crypto startups could face lower legal costs and a clearer route to US capital. If the rules are narrowed after comments, larger issuers may still rely on offshore structures or private fundraising to avoid heavier disclosure obligations.

CLARITY Act stalls in Senate

Congress is weighing the CLARITY Act, a bill intended to divide oversight between securities and commodities regulators. The measure would keep securities and crypto fundraising largely with the SEC while giving the Commodity Futures Trading Commission broader authority over trading in digital commodities.

The bill stalled before the Senate’s August break, leaving agencies to decide how far they can move without new legislation. On August 20, CFTC Chairman Michael Selig said the agency could write crypto rules using existing powers if Congress does not act.

President Trump said one day earlier that the CFTC was working to bring Hyperliquid, a large crypto trading platform that blocks US users, into the country “in a fully compliant and legal fashion.” Hyperliquid’s token rose more than 30% after the statement, compared with its level before the announcement.

$2.74 billion squeeze hits shorts

Those policy developments coincided with a market positioned for lower crypto prices. As Bitcoin and other tokens rose, short sellers had to buy back positions, a mechanical flow that can add demand when prices are already climbing.

CoinGlass records going back to 2021 show $2.74 billion of crypto short positions were liquidated in 24 hours, the largest short-side liquidation wave in that dataset. The liquidation total gave the week’s move a second driver beyond policy: forced buying by traders exiting losing bets.

The Treasury also said it would at least double long-term debt buybacks to $4 billion at a time, adding another liquidity variable for risk assets. Debt buybacks put cash into the market in exchange for securities, a channel investors track when assessing demand for volatile assets such as crypto.

The next phase turns on whether regulatory signals become rules. If the SEC exemptions advance and the CFTC opens a compliant path for platforms such as Hyperliquid, global crypto liquidity could deepen, Bitcoin may draw more institutional flows, and US exchanges could gain clearer legal footing.

If Congress remains stalled and agency rules face legal or political resistance, the effect would run in the opposite direction. Global macro exposure to crypto would stay more speculative, Bitcoin’s rally would depend more on positioning than regulation, and the wider industry would still face a fragmented US rulebook.