A historic short squeeze erased $2.7 billion in bearish crypto positions over a 24-hour period ending Wednesday, the largest such liquidation since records began in 2021, according to Coinglass data. Bitcoin’s price surged to $71,396.50 in premarket trading Thursday, up 3.4% on the session, after briefly touching $69,900.
More than $1 billion of Bitcoin short positions were liquidated within roughly one hour, marking the first recorded instance of daily billion-dollar short liquidation volume for the cryptocurrency. The unwinding of bets was concentrated across major derivatives platforms, with Binance accounting for approximately $517.6 million over four hours, Hyperliquid at $513 million, and Bybit at $303 million.
The rally extended to crypto-linked equities, which gained ground ahead of the U.S. open. Coinbase rose 7.6% in premarket trade, while Strategy added 7.8%, Circle Internet Group climbed 5.6%, and Robinhood Markets advanced 5.3%. MARA Holdings gained 4.4%, Galaxy Digital rose 4.0%, Riot Platforms added 3.5%, and Hut 8 increased 2.9%.
The surge followed a series of regulatory developments, including the SEC’s publication of a 402-page proposed rulemaking on August 18 titled Regulation Crypto Assets. The proposal outlines pathways for crypto asset offerings, including a startup exemption allowing raises up to $5 million over four years and tiered exemptions permitting up to $20 million (Tier 1) or $75 million (Tier 2) with disclosure requirements. The SEC described the move as "the most historic step yet to modernize federal securities regulations for crypto assets."
Political momentum for crypto legislation has also intensified. The CLARITY Act, which passed the Senate Banking Committee by a 15–9 vote in May, remains stalled amid a crowded congressional agenda. Senate Majority Leader Thune has scheduled a cloture vote for September 15 at 2:15 p.m. ET, designating it as the Senate’s top priority upon returning from recess. Former President Donald Trump has urged Congress to advance the bill, stating, "Now we need Congress to take the next step by passing the Clarity Act — fair version of the Clarity Act."
The regulatory and legislative landscape has evolved alongside market dynamics since early 2025, when the Trump administration took office. A Reuters/Ipsos poll published August 19 found that a majority of Americans believe Trump and his family have inappropriately profited from crypto, adding political pressure to the debate over conflict-of-interest provisions in crypto legislation.
