# Bitcoin Surpasses $80,000: ETF Demand and Short Covering Fuel Rally Weakening US dollar and rising Bitcoin ETF demand have boosted activity in the crypto sector. - **Source:** [News - Cryptonews](https://brifing.si/source/42333b6f-1c05-4a49-9914-7553e71d2223) - **Published:** 2026-08-25 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/c198c3ad-ed81-42a3-a4d5-7c6d8af25768 ## Bitcoin Hits 3-Month High In August 2026, Bitcoin surged above $80,000, reaching a 3-month peak. The cryptocurrency touched $81,200 before settling at $80,300, marking a 16% increase over the previous week. Analysts point to two key drivers behind the rally: demand for US spot Bitcoin ETFs and the unwinding of short positions as prices climbed. ## US Treasury's Bond Move The US Treasury doubled its support for longer-dated government bonds, increasing its buyback program from $2 billion to $4 billion. While this doesn't directly expand money supply, it may exert downward pressure on long-term yields. Market participants interpreted this as having an easing-like effect, contributing to dollar weakness. ## Record Demand for Bitcoin ETFs US spot Bitcoin ETFs recorded $517 million in net inflows on August 19, their strongest day since May. The funds attracted approximately $1 billion in net inflows during the first two weeks of August 2026. These ETFs provide investors with easier access to Bitcoin exposure through brokerage accounts without direct cryptocurrency ownership. ## $1.5 Billion in Short Positions Liquidated The speed of Bitcoin's rally was amplified by short covering. Approximately $1.5 billion in Bitcoin short positions were liquidated as prices rose, with $700 million cleared in just one minute. The buying pressure from traders closing short positions further accelerated upward price momentum. ## Dollar Index and Gold Movements Following the Treasury's announcement, the ICE US Dollar Index fell 0.8% during the week. Gold also broke above its 200-day moving average near $4,518 per ounce during the same period. Investors turned to scarce assets like Bitcoin and gold as hedges against dollar weakness and inflation concerns. ## Bond Yield Volatility The Treasury's decision to increase longer-term bond purchases initially received a positive response, but reversed the following day. The 10-year Treasury yield rose to 4.737%, while the 30-year yield increased to 5.276%. BMO's head of US rates strategy highlighted concerns about de-dollarization and US creditworthiness as central to recent bond selloffs. ## Bitcoin's Fixed Supply Appeal Bitcoin's fixed supply cap of 21 million coins continues to be a key attraction for investors. As a scarce asset perceived as protection against currency debasement, Bitcoin has gained attention alongside gold amid dollar weakness and inflation worries. This strengthens Bitcoin's long-term value proposition. ## Bitcoin's Potential Next Levels Uncertainty remains about whether Bitcoin can break through the $95,000 to $100,000 range. However, the August rally demonstrated how macroeconomic expectations, ETF flows, and market positioning can converge. Market participants emphasize the importance of Bitcoin's fixed supply and its role as a hedge against dollar weakness. ## Sources covering this story - https://cryptonews.com/news/bitcoin-etf-news-short-covering-rally/ — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._