<span class="acf-media-credit"><span class="acf-credit"><span class="acf-credit"><a href="theblock.co" target="_blank">The Block</a></span></span><span class="acf-credit"> | <span class="acf-credit"><a href="zepd.design" target="_blank">Illustration by Zoe Ellyse Del Rosario for The Block</a></span></span></span>Bitcoin's rebound over the past two days could mark a broader shift in market momentum amid improving liquidity conditions, renewed exchange-traded fund demand, and a more supportive U.S. regulatory backdrop, according to analysts at research and brokerage firm Bernstein.
Bitcoin rose as high as $79,500 at one point on Friday before pulling back to around $78,000, extending a rally that the Bernstein analysts linked to the U.S. Treasury's intervention in longer-dated government bonds. The Treasury said it would at least double the size of liquidity-support buybacks for longer-dated Treasuries to $4 billion per operation by Sept. 9 after a surge in long-term yields.
"We are not macro experts, but we do know bitcoin historically has had a positive reaction to liquidity expansion," the analysts led by Gautam Chhugani wrote in a note to clients on Friday. They argued that the weaker crypto market this year had partly reflected tighter financial conditions following the Iran conflict and an AI and semiconductor trade that pulled away substantial investor capital. However, as AI spending increasingly taps debt markets, Bernstein said additional liquidity could find its way into bitcoin and other hard assets as a hedge.
