The Weekly Wrap: Biggest Short Liquidation in Crypto History & Trump Remarks on Bitcoin & Hyperliquid

Listen to the Weekly Wrap on Spotify and Apple Podcasts. It is a summary with the help of AI-voices. 

This Week’s Top Stories

“The US Securities and Exchange Commission proposed new crypto offering rules.” – Tuesday, 18 August 2026 

• The SEC proposed “Regulation Crypto Assets,” a tailored securities offering framework for certain investment contracts involving crypto assets that seeks to provide a pathway for investment in crypto assets.
• SEC Chairman Atkins stated that the blockchain industry has long faced a key question: how can projects raise capital to develop crypto assets while the networks where they will be used are still being built and remain compliant with federal securities laws?
• The latest proposed rules would allow a "startup exemption" that would exempt offerings of up to $5M from registration rules under the Securities Act of 1933 for four years. The proposal also includes a "fundraising exemption" for offerings of up to $75M for a year.
• The proposal also includes a safe harbor that would allow a digital asset to no longer be considered a security if certain conditions are met.

“US President Trump: US has discussed plans to buy sizable amounts of Bitcoin and other cryptocurrencies.” – Wednesday, 19 August 

• On Wednesday, US President Trump hosted a crypto meeting with key figures from the crypto industry and top regulators to discuss the next steps in terms of legislation and making the US the crypto capital of the world.
• Trump stated at the meeting that the government has discussed plans to buy Bitcoin and other cryptocurrencies on a sizable scale. This comment marks a significant shift from the previously announced Strategic Bitcoin Reserve of the US, where funds were meant to come from seized assets instead of outright purchases.
• The market interpreted his comments as bullish, and Bitcoin and most other crypto assets traded significantly higher on Wednesday, with US crypto stocks following along as well.

“US President Trump: CFTC is working on bringing Hyperliquid into the USA.” – Wednesday, 19 August 

• At the same event on Wednesday, Trump stated that CFTC Chairman Selig is working hard to bring Hyperliquid into the United States in a fully compliant and legal fashion.
• Earlier in the week, the Hyperliquid Policy Center and trade[XYZ] jointly submitted a comment letter to the U.S. SEC proposing a regulatory framework for pre IPO perpetual contracts, or IPOPs. The HPC has been in regular contact with US regulators over the past months, as the Hyperliquid team has repeatedly mentioned that they want to work closely with regulators to provide access to US customers in the future.
• The price of the HYPE token is up roughly 27% on the week following the news. The news is rather significant because the regulatory situation in the US, and for Hyperliquid more generally, is one of the main risks for the platform.

“Treasury's Bessent says upsized bond buybacks could increase further.” – Thursday, 20 August 2026 

• On Wednesday, the U.S. Department of the Treasury announced that it is at least doubling the size of liquidity support buyback operations for longer dated nominal coupon securities. The current maximum size of $2B per operation will increase to at least $4B per operation.
• On Thursday, Scott Bessent then said in an interview that they will likely increase these bond buybacks further.
• This adds to the signs that macro policy is moving toward more active Treasury management of the long end. With the next leg of the AI buildout increasingly financed through new debt issuance, keeping long term yields under control becomes increasingly important for that investment cycle to continue smoothly.
• Together with the wording change in the latest Quarterly Refunding Announcement, the move also suggests that Bessent is more willing than Yellen to actively support the long end of the Treasury market.
• Overall, this remains a supportive backdrop for debasement hedges such as gold and Bitcoin.

Crypto finally woke up this week and put in the largest short liquidation event in history 

After weeks, if not months, of quiet price action in the crypto market, this week the market finally saw some action again, as Trump’s comments on Wednesday ignited a short squeeze rally across a wide range of crypto assets. The news surrounding Hyperliquid also led to a rally in decentralized exchanges and other DeFi providers, as the market seems to believe that Hyperliquid will likely not be the only DeFi platform able to enter the US in the future. 

Hyperliquid is up more than 25% this week, ENA is up more than 50%, ETH is up almost 30% and BTC is on track to close the week with a 20% gain. 

The total crypto market capitalization increased by $400B and is on track to post its best weekly gain since November 2024, back when Trump was elected US president for the second time. 

The liquidation numbers from Wednesday show a clear picture: many market participants were offside, as more than $2.7B in shorts were liquidated on a single day in crypto’s largest single day short liquidation event in history. Bitcoin short liquidations amounted to more than $1B on that day, also a historic number. 

Interestingly, Bitcoin dominance is up almost 2.5% on the week. A strong rally across the board with Bitcoin dominance increasing is generally something market participants view as a healthy sign. What really stands out here is that ETH was up more than 11% against Bitcoin at some point this week and is currently still in the green, up more than 4% against BTC, while overall Bitcoin dominance increased. Ethereum dominance is up 7% and currently sits at 11.3%.

Paul Tudor Jones increased his BTC holdings in Q2, for the first time since 2024 

We all know that legendary investor Paul Tudor Jones has held BTC and has been talking about his investment thesis on it for many years now. In the chart below, we can see Tudor Investment’s BTC exposure via IBIT, BlackRock’s Bitcoin spot ETF. Tudor was a net seller of IBIT since Q4 2024, when it held more than 4.5K worth of BTC via the ETF. The holdings then decreased sharply over the course of 2025, as Tudor Investments only held IBIT shares worth 327 BTC at the end of Q4 2025. 

In Q2 this year, Paul Tudor Jones increased his BTC exposure again for the first time since Q4 2024, with his exposure up 19% quarter over quarter while still being down 92% from the peak in 2024. It will be interesting to see how his holdings develop over the coming quarters and whether he has started accumulating BTC again or whether Q2 was just an outlier. Time will tell!

Base App perps by Hyperliquid & HL daily revenue reached $5M on Wednesday 

This week, Coinbase’s Base App announced that perps are now live on the application, powered by Hyperliquid, allowing eligible users to access more than 290 perpetual markets, including BTC, ETH, equities and commodity related markets, with up to 50x leverage. The product will not be available in the U.S., U.K., Canada and other jurisdictions that restrict leveraged crypto derivatives. The launch reflects Base App’s broader shift from a focus on social and creator features toward trading, payments and AI agent capabilities. 

Amid the surge in crypto prices and the general increase in trading activity, Hyperliquid generated $5M in revenue on Wednesday alone, more than 4x as much as the day before, marking its highest revenue day since June this year. 

Pump.Fun also saw a spike in revenue on Wednesday, generating more than $2.3M in a single day. Pump.Fun’s revenue has been increasing over the past weeks, as we already highlighted last week. 

Otherwise, there were no major developments onchain. The total value locked in DeFi has increased by almost 14% since last week, while the stablecoin market cap has been stagnating over the past few months and currently sits at $302B.

$1.6B inflows for BTC spot ETFs and $500M for ETH 

This week, the crypto spot ETFs saw large inflows, with the Bitcoin and Ethereum products leading the race by a huge margin. BTC spot ETFs brought in more than $1.6B so far this week, while the Ether spot ETFs are sitting on $500M in net inflows so far this week, with both recording four net inflow days so far. The Solana and HYPE products saw net inflows as well. 

The week started with the news that Strategy did not sell any further BTC last week, leaving its holdings unchanged. The company, however, sold an additional 3.5M MSTR shares for $333M in net proceeds, using the proceeds to repurchase 1.4M STRC shares and increase its US dollar reserve by $150M to now $4.8B. At the same time, BitMine acquired an additional 10K ETH last week, bringing its total holdings above 5.8M Ether, with roughly 87% of it being staked. The company’s total crypto, cash, marketable securities and other investments stood at $11.4B as of August 16. 

BitMine’s stock price increased by almost 20% this week, while SharpLink’s stock price is currently up 21% this week and MSTR, Strategy’s stock, is up 21% since last week. The stock of Hyperliquid Strategies, the company following a similar DAT strategy to the well known companies above, but with HYPE, is currently up almost 39% since Monday. Interestingly, the F13 filing of the Duquesne Family Office, with Stanley Druckenmiller in the driving seat, announced a $23M purchase of PURR during Q2, the share of Hyperliquid Strategies, at the beginning of the week, just a couple of days before the comment from Trump ignited the sharp HYPE rally. 

Also, this week, Jane Street, the Wall Street giant, disclosed owning more than $800M in BlackRock’s IBIT Bitcoin spot ETF in its 13F filing. The trading firm also owned roughly $300M in other Bitcoin spot ETFs, such as Fidelity’s FBTC or Grayscale’s GBTC, as of June 30 this year.

Crypto sentiment jumps into greedy levels this week 

The crypto fear and greed index jumped from fear levels last week directly into the greed zone (72) today. On Monday, the index was still in fear territory but then corrected to the upside sharply, following the price increases on Wednesday and Thursday. 

The CNN stock market sentiment index is lower this week and sitting in neutral levels at 52 after being in greed territory last week. At the same time, the AAII members continue to feel bearish for the stockmarket in the coming six months, as the amount of members feeling bearish increased from 38 to almost 40% this week, this number continues to stay well above historic averages of bearishness as the major US stock indices are trading lower this week.

• Citi to launch digital asset custody later this year, starting with Bitcoin. – Link 
• SafePal disclosed order data breach affecting nearly 40K customers. – Link 
• Anthropic could publicly file IPO paperwork as soon as this month. – Link 
• Moderna shares more than double on success of mRNA cancer vaccine. – Link 
• EU regulators warn of MiCA migration scams as 1’700 crypto platforms halt EU services. – Link 
• Fed minutes show September rate hike still on the table. – Link

What now? 

This week’s price action surprised many market participants, as the summer doldrums had put many to sleep over recent weeks. Looking at the historical short liquidations from Wednesday and Thursday reveals that many were actually offside and on the wrong side of the trade this week, indicating that many were feeling bearish and expected lower prices over the coming weeks. This week’s comments from Trump regarding the US buying crypto and Hyperliquid potentially entering the US market soon sparked new hope that, even if the Clarity Act should be further delayed or even rejected, US regulators will provide clarity, nonetheless. The US Treasury’s actions and comments this week likely put many investors back on the debasement trade, and Bitcoin clearly managed to benefit from it. Also, when looking at the recent gold price action, we can see that digital gold was not the only asset to benefit from it, with gold trading almost 7% higher than last Friday. 

Looking ahead, it will be important to watch whether Bitcoin and other crypto assets manage to hold the current levels or whether they reverse this week’s price action again soon. Trading volumes were low, and most shorts are now likely already liquidated. Hence, the market will be in need of buyers in the coming days or weeks. If the market manages to hold these levels, it would likely be interpreted as bullish and as the start of a potential move even higher. A deep retracement would likely reverse the entire bullish sentiment quickly, however. 

Below, you can find some of the key data releases and events to watch out for next week. 

Tuesday, 25 August 2026 

USA – New Home Sales 

Wednesday, 26 August 2026 

USA – Core PCE Price Index, PCE Price Index, GDP 

Thursday, 27 August 2026 

Switzerland – Employment level 

USA – Initial Jobless Claims 

Friday, 28 August 2026 

Japan – Tokyo Core CPI, CPI, Unemployment rate