Good morning everybody.
It’s Friday, August 21st, 2026, and apparently positivity has returned to crypto.
Chris L wrote in yesterday and said, “Upbeat episode, what a difference a bit of positivity in the market makes.”
He’s right.
When your portfolio is doing well, you feel better. Suddenly everybody is opening the Porsche website again, pricing out 911s, looking at Zillow, and figuring out what they’re going to buy when Bitcoin hits a million dollars.
Meanwhile, your wife is standing behind you saying, “Maybe we should put it in the kids’ 529 or pay off the house.”
Don’t pretend you haven’t done it.
Bitcoin is now sitting around $77,600, up another 8.5% in 24 hours.
So why is this happening?
The answer still appears to be liquidity, ETF buying, and shorts getting absolutely crushed.
Bitcoin Loves Liquidity
The biggest reason for this rally continues to be liquidity.
When markets believe the government is backstopping liquidity in the Treasury market, Bitcoin starts behaving less like a traditional stock and more like a liquidity-sensitive hard asset.
Bernstein says the U.S. Treasury’s decision to increase buybacks of longer-dated debt helped trigger this rally.
The Treasury plans to at least double longer-dated liquidity-support buybacks to approximately $4 billion per operation by September 9.
That’s important.
When Treasury steps in to support liquidity in longer-duration debt markets, investors see easier financial conditions.
And Bitcoin likes easier financial conditions.
This is the same global liquidity argument we’ve been talking about.
Crypto Currently has been following the relationship between global liquidity and Bitcoin with roughly a 75-day lag. They were pointing to improving liquidity weeks ago.
Now we’re potentially watching that liquidity show up in Bitcoin.
$1.6 Billion Flows Back Into Bitcoin ETFs
Money is also returning to the ETFs.
U.S. spot Bitcoin ETFs have brought in approximately $1.6 billion this week, following around $7 billion in outflows across May and June.
Combined assets in spot Bitcoin ETFs have climbed above $85 billion, up from roughly $70 billion in June.
Thursday alone brought approximately $606 million in inflows.
People are buying again.
And that matters because ETF inflows create actual spot demand.
You combine improving liquidity with institutional ETF buying and suddenly the market has considerably more fuel underneath it.
Another $3.3 Billion in Shorts Gets Wiped Out
Then we have the shorts.
Approximately $3.3 billion in short positions were liquidated as Bitcoin continued higher.
Again, I don’t enjoy watching people lose money.
But please stop shorting Bitcoin.
When Bitcoin starts moving quickly, leveraged shorts become additional buyers because exchanges are forced to close those positions.
That pushes Bitcoin higher.
Which liquidates more shorts.
Which creates more buying.
That’s how a normal rally can turn into a violent squeeze.
South Korean Retail Traders Are Back
Retail activity is also waking up.
Trading volume on South Korea’s Upbit jumped approximately 273% over 24 hours to $1.84 billion, its highest daily volume since March.
Bithumb volume increased roughly 132% to almost $1 billion.
XRP, Bitcoin, USDT, and Ethereum were among the major assets being traded.
This is another indication that the rally is broadening.
We’re not simply watching institutional money move through ETFs.
Retail traders are coming back too.
And once retail sees number go up, everybody suddenly remembers their exchange password.
Could Bitcoin Hit $80K Next?
Bernstein believes Bitcoin could move toward $80,000 as this liquidity-driven momentum continues.
Standard Chartered is considerably more bullish.
The bank reportedly believes Bitcoin could move toward $126,000 by year-end, arguing that even a $100,000 year-end target may now be too conservative.
Slow down.
We were sitting around $64,000 a few days ago.
Now everybody wants $126,000.
That’s Bitcoin.
My immediate number is $80,000.
Bitcoin has to get through it and stay through it.
Round numbers matter psychologically.
There are people who bought Bitcoin considerably higher who have spent months underwater. As Bitcoin approaches $80,000, some of those people are going to say:
“Okay. We’re finally getting some money back. Sell.”
Then you have people who recently bought around $60,000 or $65,000 who may decide a 20% or 30% gain is good enough.
Then you have ETF investors who can lock in profits instantly.
So I don’t think the path from $77,000 to $100,000 is necessarily going to be straight up.
I Think We Could Bounce Around the $70Ks
Even if Bitcoin breaks $80,000 and trades at $81,000, $82,000, or $83,000, I wouldn’t be surprised to see it fall back into the $70Ks.
Maybe $72,000.
Maybe $77,000.
Maybe $79,000.
Then we bounce around until another catalyst provides another shot of liquidity or demand.
And yes, Bitcoin could still go back toward $60,000.
That’s the part everybody forgets after two giant green candles.
Bear-market rallies happen.
Number goes up during bear markets.
The defining characteristic is that the broader trend eventually goes back down.
We don’t know yet whether this is the beginning of a new bull trend or a massive liquidity-driven rally inside the existing bear market.
Strategy Is Back in the Black
Strategy’s enormous Bitcoin position is profitable again.
The company holds approximately 840,447 BTC at an average acquisition price near $75,300.
With Bitcoin trading around $78,000, Strategy’s unrealized profit has climbed above $2 billion.
So Michael Saylor can breathe again.
We’ve spent weeks discussing Strategy selling stock, managing preferred shares, raising capital, and occasionally selling Bitcoin.
Now Bitcoin’s price is doing some of the work for them.
South Korea Moves Deeper Into Tokenized Funds
South Korea’s Shinhan Asset Management, which oversees approximately $96.6 billion, signed a four-party memorandum of understanding with the Solana Foundation, Etherfuse, and Orca to test the issuance and distribution of a Korean won-denominated tokenized fund.
Shinhan also announced another agreement focused on real-world assets.
Tokenized real-world assets, excluding stablecoins, are now estimated at approximately $36.2 billion, representing enormous growth since 2020.
We’ve been talking about tokenization repeatedly because this is where institutional crypto adoption is actually happening.
Stocks.
Treasuries.
Funds.
Collateral.
Real-world assets.
Traditional finance is increasingly moving onto blockchain infrastructure whether people want to call it “crypto” or not.
Trump Keeps Pushing the CLARITY Act
Trump’s White House crypto meeting earlier this week is still contributing to the bullish narrative.
The president is pushing Congress to pass the CLARITY Act, which would establish clearer jurisdiction between the SEC and CFTC over digital assets.
But I think there’s another layer here.
Midterms.
Fairshake and other crypto political organizations have enormous amounts of money available for campaigns.
Crypto executives supported candidates because they wanted legislation.
Now they’re going to want results.
If you’re a senator heading into a competitive election and the crypto industry is sitting on hundreds of millions of dollars in political spending, that’s leverage.
“Want our support? Get this done.”
I suspect there is a lot more political pressure happening behind the scenes than we’re seeing publicly.
The CLARITY Act Could Become More Important After the Midterms
The interesting thing about CLARITY isn’t simply what happens under the current administration.
It’s what happens if political control changes.
If Democrats eventually control Congress or the White House and decide to take a much more aggressive regulatory approach toward crypto, legislation establishing clear boundaries could become the industry’s primary protection against regulation through enforcement.
That’s why these rules matter.
Crypto companies need to know what they can legally do regardless of which political party happens to control Washington.
A regulatory framework shouldn’t depend on who won the last election.
AI Use in Crypto Crime Jumps 40%
TRM Labs says AI adoption within crypto crime increased approximately 40% year over year, with scams currently showing some of the most mature use of artificial intelligence.
TRM’s 2026 AI Crime Adoption Index reportedly puts overall AI use in crypto crime at 54 out of 100, compared with 28 in 2024.
This is something we’re going to talk about much more.
AI isn’t simply changing crypto.
It’s changing everything involving data.
Finance.
Cybersecurity.
Sports.
Business.
Markets.
Scams.
Hacking.
There are patterns buried inside enormous datasets that humans couldn’t efficiently identify before.
AI can.
We’re still incredibly early in understanding what that actually means.
Crypto Prices
Bitcoin: $77,600, up approximately 8.5%
Ethereum: $2,388, up approximately 5%
Tether: #3
BNB: $679, up approximately 6%
XRP: $1.41, up approximately 16.5% and 41% on the week
USDC: #6
Solana: $91, up approximately 5%
TRON: $0.34
Hyperliquid: $77.29, up approximately 8%
Dogecoin: $0.083, up approximately 8.4%
Total Crypto Market Cap: $2.59 trillion, up approximately 6.8%
Fear & Greed Index: 71, Greed
My Take
Something has clearly changed.
We were sitting around $60,000 with everyone miserable, and now Bitcoin is approaching $80,000 while the Fear & Greed Index has jumped to 71.
Maybe Malcolm the Earthling was right.
Maybe The Inspirator 🚀 🔥 was right.
Maybe $60,000 really was the bottom.
But I’m not ready to declare victory yet.
Liquidity is improving.
ETF money is coming back.
Shorts are getting destroyed.
Retail activity is increasing.
Those are real catalysts.
But bear markets have violent rallies too.
If Bitcoin can break $80,000, hold it, absorb the sellers waiting at those psychological levels, and continue attracting liquidity, then I’ll start taking the bull case considerably more seriously.
Until then, enjoy number go up.
And maybe keep the Porsche configuration in your browser tabs instead of putting down the deposit just yet.