Bitcoin Tops $71,000 as SEC Unveils First Major Crypto Rule

Bitcoin Tops $71,000 as SEC Unveils First Major Crypto Rule

Bitcoin has decisively broken out of the tight $62,000–$66,900 band that had contained it for six weeks, surging past $71,000 for the first time since June. The move added roughly 11% in 24 hours and triggered the largest wave of short liquidations since at least 2021 — an estimated $3 billion in bearish bets forced to buy back into thin order books, dwarfing the $263 million in long liquidations over the same period.

The rally wasn't driven by a single crypto headline. It started with a macro shift: the U.S. Treasury announced it would at least double its long-dated bond buybacks, pulling the 30-year yield down from a multi-decade high near 5.34%. That easing in the bond market lifted appetite for risk assets broadly, and Bitcoin — sitting on a dense cluster of short positions between $65,000 and $67,000 — became the prime target of the resulting squeeze. Once the ceiling gave way, forced buying carried the price up more than 8% within a single hour.

Ether rode the same wave even harder, jumping close to 19% to trade near $2,270, its highest level in three months. Solana, XRP and Dogecoin all logged double-digit gains, bitcoin's daily trading volume climbed roughly 250% to around $59 billion, and the Fear & Greed Index swung from "fear" into "greed" territory.

Washington Adds a Second Leg to the Rally

Hours after the initial squeeze, political developments gave the market fresh momentum. President Donald Trump used a White House meeting with crypto industry executives to press Congress to advance the long-stalled Digital Asset Market CLARITY Act, floated the idea that the U.S. government could make sizable Bitcoin purchases, and confirmed regulators are exploring a compliant U.S. pathway for the Hyperliquid exchange. Coinbase, Strategy and other crypto-linked stocks extended their gains as the comments landed.

The SEC Makes Its Move With "Regulation Crypto Assets"

The political tailwind followed closely on the heels of a separate, arguably more consequential development: the U.S. Securities and Exchange Commission's first substantive crypto rulemaking under Chairman Paul Atkins. Just days after abruptly canceling a vote on the measure, the SEC formally proposed "Regulation Crypto Assets," a framework designed to let digital-asset projects raise capital without automatically triggering full securities registration.

The proposal creates two paths for crypto issuers. A "startup" track allows a one-time raise of up to $5 million over four years with lighter disclosure obligations. A second, more permissive track permits raises of up to $75 million per year but comes with heavier requirements, including financial statements and ongoing reporting comparable to existing investment-contract rules. Both tracks would still fall under the SEC's anti-fraud and anti-manipulation provisions.

Perhaps more significant for mature networks like Bitcoin and Ethereum, the rule would also create a safe harbor allowing a crypto asset to exit "investment contract" classification entirely once the project's founding team has completed or permanently wound down the managerial efforts it originally promised. In effect, a token that starts life looking like a security could eventually graduate out of that designation as the network decentralizes.

Atkins framed the proposal as a bridge rather than a final answer, noting that durable, congressionally passed market-structure legislation is still needed to protect the SEC's current work from being reversed by a future administration. The agency has opened a 60-day public comment period before it can move toward a final rule, a process expected to stretch into late 2026.

Industry reaction was largely positive. The Digital Chamber's CEO said the SEC had incorporated a number of suggestions raised by crypto firms during earlier consultations, while continuing to push the Senate to pass permanent legislation before its extended recess.

Why It Matters

Together, the two developments outline the shape of the current U.S. crypto cycle: a market that remains highly sensitive to leverage and liquidity mechanics, layered on top of a regulatory environment that is, for the first time in years, actively trying to create formal on-ramps for compliant crypto fundraising rather than relying solely on enforcement. Traders should note that Wednesday's move was fueled largely by forced short covering rather than a broad wave of new spot demand — a pattern that has historically been prone to giving back gains once the squeeze mechanics fade. Whether Bitcoin's break above $71,000 holds may depend less on Thursday's headlines and more on whether spot buyers show up to defend the new range, and whether Congress can convert the SEC's proposal and the White House's rhetoric into the kind of durable legislation the industry has been requesting for years.