Bitcoin's Price Surge Driven Mainly by Short Covering, Fails to Return to Bull Market

Bitcoin recently surged 23% in a single week, marking its largest weekly gain in over three years, ending a period of stagnation since summer. U.S. Treasury Secretary Janet Yellen proposed expanding the scale of long-term Treasury buybacks, prompting market concerns over U.S. debt and dollar depreciation, which shifted funds towards alternative assets like Bitcoin. However, after breaking the $80,000 mark, Bitcoin has stabilized, and this catalyst alone is insufficient to bring the market back into a true bull state. The narrative of Bitcoin as a hedge against the dollar and inflation lacks sustainability. After former President Trump reiterated threats of tariffs on China last October, Bitcoin fell over 12% within 24 hours, while gold reached a historic high during the same period. Since 2026, gold has cumulatively risen over 7%, while Bitcoin, even accounting for the recent rebound, has dropped nearly 10%. The simultaneous rise of gold and Bitcoin last week does not prove that both have the same safe-haven properties; this round of cryptocurrency market gains primarily stems from forced short covering. Strategy Chairman Michael Saylor called on traders to continue buying Bitcoin during the rise, but his company did not increase its holdings accordingly. Additionally, the CLARITY cryptocurrency market structure bill has stalled due to disagreements over ethical provisions, with the Senate expected to revisit it only by mid-September, leaving limited time before the midterm elections in November. Bitcoin has yet to establish a stable and convincing value narrative, and users still prefer to use stablecoins or cash for everyday payments.