Scaramucci Credits Bessent's Long-End Treasury Move for Bitcoin Rally, Dismisses Clarity Act

Bitcoin held above $86,000 on Tuesday after a multi-session rally that analysts say marks the end of the token's cyclical crypto winter. The token jumped more than 5% on Friday and another 6% on Monday, breaking solidly above its 50-day moving average. Sean Farrell, head of digital assets, told Yahoo Finance the breakout is credible and that the crypto winter is over, though he cautioned the path higher may not be linear. Compass Point analyst Ed Engle wrote that crypto is in the early innings of a new bull market with few signs of overheating, while Nansen senior research analyst Nicolai Sondergaard attributed the move to a combination of renewed ETF demand and a large short squeeze. Altcoins also surged after the Securities and Exchange Commission granted a five-year exemption last week for trading in certain tokenized stocks, a move that followed the Senate's failure to advance the Clarity Act. The total cryptocurrency market capitalization stood at $2.94 trillion on Monday, about 30% below its record valuation in October, when bitcoin reached an all-time high of more than $125,000.

Bitcoin climbed to a 7-month intraday high of $87,395 on September 21, its strongest price since January 29, and traded at $85,326 at press time, up 4.90% over 24 hours. The rally followed a weekly close back above the 50-week moving average, a level that has historically signaled bear-market lows, and was fueled largely by a short squeeze: Coinglass data showed $746.6 million in crypto liquidations over 24 hours, with shorts accounting for $647.9 million, while market-wide trading volume rose 39% to roughly $224 billion. Sentiment and institutional flows followed the price, with Santiment recording the largest spike in bullish commentary since December 2024 at 954 mentions versus 269 bearish, the Crypto Fear and Greed Index climbing to 78, or Extreme Greed, from 70 on Monday and 69 a week earlier, and spot Bitcoin ETFs absorbing $999 million on September 21, their largest single day since October 6, 2025, lifting total net assets to $110.1 billion from $102.5 billion. Corporate treasuries also stepped up: Strive bought 1,355 Bitcoin for about $107.7 million between September 14 and September 18, raising its holdings to 26,355 Bitcoin, while Strategy disclosed a purchase of 950 Bitcoin that took its total to 846,000 coins. Two signals still flash caution, however: open interest across crypto derivatives rose 7.59% to about $156 billion even as shorts were liquidated, suggesting traders opened new positions rather than reducing risk, and the Coinbase Premium Index remains negative at -0.028, though it has recovered from deeper readings earlier in September.

Strategy's 846,000 Bitcoin holdings have swung back into roughly $8 billion of unrealized profit as Bitcoin rallied above $85,000, reversing the damage from a brutal second quarter. The Michael Saylor-founded company acquired its 846,000 BTC for approximately $63.8 billion at an average price of $75,416 per coin, and with Bitcoin trading around $85,000 on Monday those holdings are worth roughly $72 billion, leaving about $8 billion in unrealized gains. The turnaround follows an $8.2 billion net loss for the second quarter, when unrealized losses on the Bitcoin portfolio approached $10 billion at the downturn's worst point. Strategy also resumed accumulation, buying 950 BTC for $75.7 million between Sept. 14 and Sept. 20 at an average of $79,670 per coin, funded from cash rather than new share issuance, and ended Sept. 20 with a $5.04 billion USD Reserve and $1.05 billion in USD Cash. The company's largest capital allocation last week was not Bitcoin, however: it spent approximately $174 million repurchasing 1.77 million shares of its STRC preferred stock, more than twice what it spent on BTC, as management tries to move the preferred shares closer to their $100 par value and reduce future dividend obligations. Strategy's holdings represent just over 4% of Bitcoin's fixed 21 million supply cap, and every $1,000 move in Bitcoin changes the market value of its position by roughly $846 million.