Washington Just Gave Bitcoin Its Best Week of the Year

Bitcoin ran as high as $79,442 Friday morning, up 23% in a week, its sharpest climb of the year.

Washington supplied the push: the SEC's first crypto rulebook, crypto executives at the White House, and a Treasury move that sent borrowing costs lower, all inside two days.

Crypto stocks rose even harder.

What happened in Washington?

The Securities and Exchange Commission proposed its first crypto rulebook Tuesday: a framework called Regulation Crypto Assets. For years the SEC policed crypto mainly through lawsuits, and companies selling digital tokens never knew which sales were legal. The new framework hands them instructions: a startup can raise up to $5 million by selling tokens without registering, larger projects can sell up to $75 million a year if they publish audited financial statements, and a token whose network is finished can file to leave securities law behind entirely.

The rulebook barely touches bitcoin itself. Bitcoin rose because the proposal eased crypto's biggest fear: that Washington would eventually regulate the industry out of existence. The SEC now appears ready to accommodate the industry rather than fight it.

Public comment runs 60 days, and the SEC can finalize the rules on its own, no act of Congress required.

President Trump hosted crypto and stock-exchange executives at the White House Wednesday, with the heads of both market regulators in the room. Coinbase (COIN) CEO Brian Armstrong and Robinhood (HOOD) CEO Vlad Tenev sat at that table.

Trump pressed the Senate to pass the CLARITY Act. No law today says which federal agency oversees digital assets. The bill draws the line: the commodities regulator would take most digital assets, bitcoin included, while the SEC keeps tokens that work like stocks. With clear rules, banks, brokerages, and retirement funds can offer crypto inside ordinary accounts. That is the path for new money to reach bitcoin.

The Treasury moved the same day. Starting September 9, it will at least double its buybacks of its own long-term debt, from $2 billion per operation to $4 billion. When the government buys its own bonds, long-term borrowing costs fall, and money moves toward assets investors use to protect against inflation. Borrowing costs fell within hours of the announcement.

Short sellers turned the policy climb into a major Bitcoin price spike. Wednesday's jump forced traders to close more than $1 billion in bets against bitcoin in about an hour, per the data tracker Coinglass.

Across all cryptocurrencies, traders lost $2.7 billion in short bets in 24 hours, the most in records going back to 2021. Forced buying pushes prices higher, which forces more buying. Wednesday alone, bitcoin rose 7%.

All things considered, what does this mean for Bitcoin and proxy stocks?

The closer the business is to bitcoin, the harder the stock moves

Gold rose least: it holds no crypto, so the Treasury news moved it on its own.

Robinhood rose 12%, less than bitcoin itself, because crypto is a sliver of its business: $100 million of its $1.31 billion in second-quarter revenue.

The rest of the company grew without crypto's help last quarter. Thirteen business lines now produce revenue at a $100 million annual pace, and prediction markets out-earned crypto trading, $156 million to $100 million. A bitcoin surge lifts one line among many.

Coinbase rose 27%. About half its revenue is fees on crypto trades, so a trading surge flows straight to the top line. It also holds crypto on its own balance sheet: falling prices forced a $209 million markdown last quarter, and rising prices swing that same line back to gains. A bitcoin move touches every part of this business.

Strategy (MSTR) rose 29%, the biggest move of the group. Strategy owns 840,447 bitcoins, about 4% of all the bitcoin that will ever exist, worth roughly $65 billion at this week's prices.

Strategy bought those coins largely with borrowed money and stock sales, and about $22 billion in debt and preferred stock stands ahead of common shareholders. Shareholders own what is left after those claims, so every bitcoin move hits this stock harder than the coin itself.

The same order holds on the way down.

This year's crypto slide, before this week, hit Coinbase nearly twice as hard as Robinhood, with bitcoin in between.

Digital Gold

Gold is up 5% this week on the same Treasury announcement.

But its climb was already underway: gold is up 14% over the past six weeks, and it sits 14% below the high it set in late January.

We have called bitcoin digital gold for years: a scarce asset no government can print. When gold and bitcoin rise together on government policy, investors are buying protection against a dollar that buys less.

Bitcoin has been an Infinite Hold position in the LikeFolio playbook since February 2023, entered near $24,000. Even after the past year's slide, the position is up more than 220%.

We’re also watching some surprising developments…

A $100 million hack is pushing bitcoin holders toward custodians

Bitcoin's most committed holders store their coins on hardware wallets, small offline devices that keep the keys out of any company's hands.

Since July 30, attackers have drained more than $100 million in bitcoin from over 5,000 addresses by exploiting a five-year-old flaw in Coldcard, a popular hardware wallet. The flaw made some devices generate keys weak enough for modern computers to crack.

The victims held their own keys, offline, exactly as bitcoin purists advise. The device failed them.

Money moves toward safety after a scare like that, and in crypto, safety increasingly means professional custody.

Coinbase already stores the bitcoin for nine of the twelve US spot bitcoin ETFs, the funds that hold bitcoin and trade like a stock. That covers roughly 80% of everything those funds own, according to research from the asset manager Bitwise.

Every self-custody scare strengthens the case for the custodians.

The Long-Term View: Everyday investors are still missing

Coinbase web visits are down 52% from a year ago, and the series is still falling.

Robinhood's audience holds steady at its year-ago level through the same stretch.

Policy and forced short-covering drove this week's move. Everyday investors played a lesser part in it.

Until the crowd returns, this rally rests on Washington.

Bitcoin near $80,000, though, is exactly the kind of number that brings the crowd back.

If regular investors return, our web-visits data shows it before any revenue report does, because Coinbase's trading revenue follows its traffic, and traffic follows price.

The Senate delivers the next catalyst September 15, for better or worse

The Treasury's larger buybacks begin September 9.

The Senate votes September 15 on whether to take up the CLARITY Act, which cleared the House 294 to 134; the motion needs 60 votes, and a failure could kill the bill. The SEC's comment window runs into October.

Washington built this week's move, and Washington can take it back.

Even after its best week of the year, bitcoin sits 38% below its October 2025 peak near $126,000.

Our monthly Gut Check plots every sector on two axes: consumer demand on one, investor attention on the other. In the August reading, taken days before this week's move, crypto sat in the cold corner, with the weakest consumer demand of any sector except cannabis.

Professional investors moved their side of that map this week. We’re watching for retail investors next.