Bitcoin (COIN:BTCUSD) jumped sharply on Thursday, leading a broad recovery across cryptocurrency markets after U.S. President Donald Trump urged Congress to advance key digital asset legislation and falling Treasury yields boosted appetite for riskier assets.
Sentiment was also lifted by the U.S. Treasury's decision to double the size of its debt buyback operations, a move that triggered a steep decline in government bond yields and helped fuel demand for cryptocurrencies.
Bitcoin climbed 11% to $71,505.7 by 04:42 ET (08:42 GMT), having reached an intraday high of $71,700, its strongest level since early June.
The sudden move caught bearish traders off guard. Coinglass data showed that more than $1 billion of Bitcoin short positions were liquidated in roughly one hour, while a record $2.7 billion of bearish positions were erased across the wider cryptocurrency market.
Geopolitical uncertainty remained a potential constraint, however, as oil prices continued to rise amid the U.S.-Iran conflict and Trump's pledge to introduce tougher economic measures against Tehran.
Trump used a White House meeting with cryptocurrency industry executives on Wednesday to press lawmakers to approve the Clarity act, legislation intended to establish a broader regulatory framework for digital assets in the United States.
The president called on Congress to pass a "fair version" of the Clarity act, which supporters argue would provide greater regulatory certainty for the crypto industry.
The meeting included senior industry executives such as Coinbase CEO Brian Armstrong and Robinhood CEO Vlad Tenev, alongside U.S. Commodity Futures Trading Commission Chair Mike Selig and Securities and Exchange Commission Chair Paul Atkins.
Progress on the Clarity act has largely stalled in Congress amid disagreements over how cryptocurrencies should be regulated and whether stablecoin deposits should be permitted to offer yield.
The latter issue has drawn particular opposition from the banking industry, which argues that interest-like payments on stablecoins could compete directly with traditional interest-bearing savings accounts.
Wednesday's discussions also took place amid increased scrutiny of the financial benefits Trump and his family have received from cryptocurrency ventures during his second term. Filings published in July showed that Trump received more than $1.4 billion from his family's crypto businesses.
The CFTC is scheduled to hold further discussions with cryptocurrency executives on Thursday as regulators continue examining the industry's future framework.