BItcoin
Bitcoin reached $87,381 during U.S. trading Monday after rising nearly 8%, before retreating to around $85,000 Tuesday. AFP

Bitcoin's sharp rebound has pushed the cryptocurrency market back above $3 trillion for the first time since January, with the world's largest digital asset climbing to an eight-month high as institutional buying and a wave of short liquidations accompanied the broader rally.

The digital-asset market has added more than $740 billion in value since the U.S. Treasury announced last month that it would increase buybacks of long-dated bonds, according to CoinGecko data cited by Bloomberg. Bitcoin reached $87,381 during U.S. trading Monday after rising nearly 8%, before retreating to around $85,000 Tuesday.

Monday's move took Bitcoin to its highest level since January, although the cryptocurrency remained well below its October 2025 record above $126,000. The rally has also brought more leveraged trading into the market, with open interest in perpetual futures across cryptocurrencies climbing to nearly $160 billion, the highest since late October 2025, according to CoinGlass data.

Perpetual futures allow traders to take positions on cryptocurrency prices without a fixed expiration date, while open interest measures the number of outstanding contracts that have not been closed. More than $920 million in bearish positions were liquidated Monday as cryptocurrency prices rose, even as overall open interest continued to increase.

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Demand through U.S. spot Bitcoin exchange-traded funds also picked up during the rally, with the funds recording $999 million in net inflows Monday, their largest single-day total since Oct. 6, when Bitcoin reached its record high. The ETFs had returned to net inflows late last week after steep withdrawals earlier in the week.

BlackRock's iShares Bitcoin Trust accounted for about $381 million of Monday's inflows, while the ARK 21Shares Bitcoin ETF drew about $289 million and Fidelity's Wise Origin Bitcoin Fund received roughly $239 million, according to SoSoValue data.

Institutional buying has extended beyond ETFs, with Strategy disclosing Monday that it purchased another 950 Bitcoin for about $75.7 million between Sept. 14 and Sept. 20, bringing its holdings to 846,000 Bitcoin. The company paid an average of $79,681 for its latest purchase, The Wall Street Journal reported.

The latest advance has come after several developments that had weighed on cryptocurrency prices. The Federal Reserve raised its benchmark interest rate last week for the first time in three years, while the crypto industry's push for a broad U.S. market structure law suffered a setback when the Senate failed to advance the CLARITY Act.

The legislation failed on a 49-50 Senate vote, falling short of the 60 votes needed to move forward. The bill was intended to establish a broader federal framework for digital assets and clarify the roles of the Securities and Exchange Commission and Commodity Futures Trading Commission. Democrats opposed the legislation over several issues, including concerns involving President Donald Trump's crypto interests, while the banking industry had raised objections over provisions affecting stablecoin rewards.

Bitcoin initially fell following the Senate vote before recovering in subsequent sessions. The SEC and CFTC have continued working on cryptocurrency rules separately from the stalled legislation, while Bitcoin has gained more than 8% over the past five trading sessions, Investopedia reported.

Moves in other financial markets have accompanied the crypto rebound, with oil prices falling Monday as traders followed developments surrounding the Iran conflict and possible U.S.-Iran diplomacy during the United Nations General Assembly in New York. Treasury yields also eased after moving sharply higher around last week's Federal Reserve decision.