Why Bitcoin Is Surging 21% After the Treasury’s Bond Market Intervention
Custodia Bank founder Caitlin Long explains why Bitcoin is enjoying its best week in years
By: Zack Guzman
August 21, 2026
Bitcoin is enjoying its best week in years — surging more than 20% — after the U.S. Treasury signaled that it's stepping in to help push longer-dated bond yields lower.
Even though interest rates have snapped back since Treasury Secretary Scott Bessent made the announcement on Wednesday, Custodia Bank founder Caitlin Long explained to Coinage why Bitcoin may be poised to continue benefitting from the news.
“There was a macro reason potentially for the market rally,” Long told Coinage at the SALT Wyoming Blockchain Symposium this week. “It was basically the U.S. Treasury kind of doing a version of yield curve control.”
Notably, 30-year bond yields hit a 19-year high on Tuesday and dropped considerably after the Treasury's announcement. Bitcoin rallied to trade beyond $70,000 and strengthened later in the week to surge past $75,000 as Secretary Bessent signaled more of the same intervention could follow in size.
“That is dollar negative,” Long said. “And dollar negative equals risk assets go up usually, and that’s what happened.”
When coupled with other announcements from regulators this week, Long emphasized that a lot of narratives are now working in Bitcoin's favor. Much of the debate over the last several years has centered on what Bitcoin actually trades like. Is it digital gold? An inflation hedge? A high-beta technology asset? A liquidity barometer?
Long’s answer, at least this week, is effectively: All of the above.
Gold rallied alongside Bitcoin following Treasury’s announcement, reinforcing what Long described as the “debasement trade” — assets benefiting when investors believe policymakers may ultimately accept a weaker currency in order to support markets or keep borrowing costs under control.
“The Treasury is essentially saying they’re going to defend interest rates,” Long said. “They’re going to defend the long end of the bond market. And if they have to reduce the value of the dollar to do it, then so be it.”
That is a powerful setup for an asset built around a fixed monetary supply. And it may help explain why Bitcoin’s move was so aggressive. Crypto entered the rally with plenty of traders positioned for further downside. As prices jumped, Long noted, a wave of short positions was taken out, adding fuel to the move.
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But even within Bitcoin, miner fundamentals seem to be screaming all the usual signs of a bottoming process. When Bitcoin prices fall far enough, marginal miners become unprofitable. Eventually, some shut down, sell Bitcoin, or increasingly repurpose their power infrastructure toward artificial intelligence and high-performance computing.
Pointing to some Bitcoin miners closing up shop, along with some crypto exchanges, Long explained that the ecosystem is re-living what historically has happened in the dying breaths of prior Bitcoin bear markets.
"I've never been one that thought that the four year cycle was dead," she said. "I don't make price predictions, but I look at that and say, boy, if past is prologue, it sure does look cheap."
Long thinks another announcement made this week could prove even more significant over time — even if it received far less attention from markets.
Under proposed rules tied to the GENIUS Act, Long said the Treasury would gain authority to determine which non-U.S.-issued stablecoins are considered valid in the United States. As someone who has taken on The Fed to unlock access to the U.S. banking system at Custodia, Long explained why it was a major win in what has been resistance by the Fed to embrace innovation.
"[Treasury Secretary] Bessent ... is basically just saying, 'I'm not waiting. I'm just grabbing all this,'" Long said.
Long framed the change through the old eurodollar market — essentially dollars issued outside the United States. In a tokenized financial system, offshore stablecoins could become a modern digital version of that market. Historically, oversight of that financial plumbing has fallen heavily within the Federal Reserve’s orbit.
Now, Long argues, Treasury is taking a much larger role.
"It definitely means more volatility for us, because the Treasury Secretary position is a presidentially appointed position, so it's going to change with presidencies, but it also means a lot more openness to tokenization, of course, and frankly, control of the plumbing of the fiat money system coming back into the Treasury Department from the Fed," Long said. "That is news, and that is really big."
Custodia spent years pushing for access to the Federal Reserve’s payment system, only to meet resistance. Long now argues that the Fed’s reluctance toward crypto and tokenization may partly reflect just how difficult it would be for the central bank’s own infrastructure to keep up.
“I have concluded the Fed’s own systems are so antiquated that this is a major reason why they have been so opposed to all of this innovation,” she said, arguing that greater adoption of blockchain technology could expose how outdated some of those systems have become.
Nonetheless, the market seems to be waking up to Long's thesis — and the combined history of prior market cycles seems to support a lot of Bitcoin's price action now.
"I have always thought there are fundamental reasons why we have always had that four year cycle because of the way the miners have behaved, and we're starting to see that miner capitulation," Long said, noting that bear markets usually run their course about a year before the next halvings (when miner rewards are cut in half.)
"We've seen miners flip out of Bitcoin into AI if they can be competitive there or literally shut down, which is a normal cyclical part of the bear cycle. And we're seeing it again ... all the chart squiggles are screaming, 'really loud buy' right now."
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