The US Treasury made a surprise announcement that it will double the scale of its long-term bond purchases from $2 billion per operation to at least $4 billion. Mechanically, since this is a zero-sum structure funded by issuing short-term bills, it doesn't actually increase total supply, but the market is interpreting this as a de facto mini-quantitative easing signal. As long-term bond yields fell and the dollar weakened, the debasement trade—hedging against asset devaluation—has reignited.

The market has literally turned upside down following this single macroeconomic signal. Bitcoin touched $69,000 at one point, and Ethereum also showed strength, breaking through the $2,000 mark. During this process, an all-time level squeeze occurred, with short positions betting on a decline facing $1.2 billion to as much as $1.44 billion in forced liquidations. Foreign media outlets like The Block are analyzing that the combination of the Treasury's increased bond buying and the SEC's recent proposed relaxation of crypto regulations has added fuel to the market rally.

The notable part here is the clear polarization in capital flows. While hundreds of millions of dollars are flowing rapidly into large Bitcoin spot ETFs like BlackRock's IBIT, Hashdex's DEFI ETF, which had a smaller asset scale, has ultimately entered liquidation. In the end, we are seeing a phenomenon where capital is shifting extremely toward larger, more reliable assets when signs of liquidity easing emerge. For the time being, these subtle shifts in macroeconomic capital flows look set to be the most powerful engine for the crypto market 😄

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