The Week in One Sentence
Bitcoin posted its best week since March 2024, Washington set a September 15 CLARITY vote, and the BIP-110 fork ended with a frozen chain and a fired editor.
1. The 22% Week
Bitcoin just had its strongest week in nearly two and a half years. From roughly $63,100 last Friday, it ran to a peak of $79,463 on Friday afternoon and settled near $77,000, a gain of about 22%, its best weekly move since March 2024.
No single headline did that. Four things stacked.
The biggest was the Treasury. On Thursday, Secretary Scott Bessent announced the department would at least double its long-end bond buybacks, from $2 billion to $4 billion or more per operation on 10-to-30-year securities, starting September 9. That is not money printing, and it is not the Fed. But markets read it as Washington actively working to pull long-term yields down, and falling yields lower the cost of holding an asset that pays none. CoinShares' head of research James Butterfill put it plainly: the rally "is primarily a macro story rather than a crypto specific one."
The second was inflation. The July CPI report on August 12 came in tame for a second straight month, 3.4% annually, down from 3.5%, with core at 2.5%. After the shock jobs report we covered in issue #026, two benign prints in a row have markets betting the Fed's September hike is off. One caution belongs here: the moderation has come mostly from falling energy prices, and crude jumped 10% this week. The next report can undo this one.
The third was Washington, which gets its own story below. And the fourth was mechanical: the breakout forced roughly $3 billion in short liquidations, per industry reporting, meaning a meaningful slice of the move was traders being carried out rather than buyers walking in. The spot ETFs did their part too, taking in $1.92 billion across five straight sessions, though Friday's inflow was less than half of Thursday's.
Keep three things in frame. Bitcoin did this while global stocks had their worst week since mid-July, a divergence worth respecting but not extrapolating. It remains about 39% below its October high of $126,198, so this is a rally within a drawdown, not a new high. And the loudest voices are not uniformly euphoric: Standard Chartered now calls for $100,000 by year-end, while Token Bay Capital's Lucy Gazmararian, who thinks the bear market is ending, still expects "one final flush" of as much as 20%. Butterfill flags $80,000 as the boundary that matters, and says a decisive move through it likely needs the Fed to confirm it is done tightening. Which brings the calendar to Jackson Hole this week.
2. Washington Turned On a Dime
Two weeks ago we wrote that the CLARITY Act was done for the year, with prediction markets near 17%. The fuller picture emerged hours after that issue went out, and the weeks since have rewritten the story.
At 4:52 on the morning of Saturday, August 8, at the end of an overnight session, Majority Leader John Thune filed cloture on the motion to proceed to the bill. That filing, which came too late for a pre-recess vote and too early for our deadline, locked in a procedural vote for 2:15 pm on Tuesday, September 15, the day after the Senate returns. Thune had said the bill would be queued up "first thing when we come back." It now formally is.
Then, this week, the administration went all in. On Tuesday the SEC proposed a framework it calls Regulation Crypto Assets, creating registration exemptions for crypto fundraising, including a $5 million allowance for startups, disclosure requirements, and a path for assets to exit securities classification as their networks decentralize. On Wednesday, President Trump convened crypto executives at the White House, flanked by the CEOs of Coinbase, Robinhood, and Kraken, and urged Congress to pass a "fair version" of CLARITY, saying it would keep the US "ahead of China." On Thursday the CFTC's new Innovation Advisory Committee met for the first time. A regulator proposing rules, a president campaigning for the bill, and a vote on the calendar: that is a different posture than the one Washington left town with.
Here is the discipline the moment requires. A cloture vote on a motion to proceed is not passage. It is the vote that permits debate to begin, it needs 60 votes, and Republicans hold 53. The same three disputes that killed the August window are still unresolved: the ethics provisions, illicit finance safeguards, and stablecoin yield. On ethics, Senators Gallego and Tillis sent the White House a compromise in late July that would let state attorneys general enforce a ban on officials issuing digital assets, and would require the president to divest from his crypto businesses. The White House has not responded. That silence is why the prediction markets barely moved on all the good news: Polymarket has crept from a low of 13% to roughly 17-20%, and Kalshi prices the 60-vote threshold at about 22%. Coinbase's Brian Armstrong reads it differently: "He would not have scheduled this on Sept. 15 if he didn't think it would pass." Someone is wrong, and September 15 tells us who.
3. The Fork's Postscript: A Frozen Chain and a Fired Editor
Issue #026 went to press hours after Bitcoin split in two. Here is how that story ended.
The BIP-110 chain never found a third block. It froze at 961,633, and by Monday the main chain was 111 blocks ahead and pulling away. Roughly 99.85% of the network's hashpower had stayed put. Ocean, the pool behind nearly all the signaling, disclosed that a server error had misdirected some of its miners at the stalled chain for about 18 hours and said it would reimburse them 0.3 Bitcoin, then quietly restored its non-signaling default the next day. No exchange ever recognized the minority chain. The proposal is now marked Closed in the repository. Some backers have talked about escalating to a change of Bitcoin's proof-of-work algorithm, which would create a genuinely separate coin, but that is a fringe plan, not a live threat. The dispute that produced all of this, what block space is for, remains unresolved. The mechanism for forcing an answer failed completely.
The human consequences arrived faster than the technical ones. On August 9, BIP editor Mark Erhardt filed a motion to remove Luke Dashjr, the proposal's most prominent champion and the man who had controlled BIP numbering since 2011, from the editors' role. The allegations were specific: that Dashjr used his editorial position to favor a proposal he was part of, trying to assign it a number before the required mailing-list discussion, and that he had otherwise contributed less than 1% of editor comments since co-editors were added in 2024. Twenty-six hours later, his repository access was revoked. Dashjr rejected the accusations as false, called the removal "an abuse of power by Core," and announced a sabbatical from Ocean minutes after it was confirmed. Not everyone comfortable with the outcome was comfortable with the method. Developer Antoine Riard backed the result but objected to the speed, arguing the accused deserved weeks to respond, not a day.
Sit with the asymmetry, because it is the real lesson of the whole episode. Bitcoin's protocol resolved the dispute in about eight hours, with arithmetic. Hashpower voted, the minority chain could barely produce blocks, and the question answered itself without anyone's permission. The humans took longer and did it messier: the first removal of a sitting BIP editor in Bitcoin's history was decided by an informal tally of GitHub reactions, because the governing document contains no removal procedure at all. Bitcoin's code is the most rigid system of rules in finance. The institutions around it are improvised, personal, and made of people. This month showed both at full strength, and it is worth being honest that only one of them handled it gracefully.
The Numbers
| Metric | Value |
|---|---|
| BTC Price | ~$77,000 (Fri Aug 21 close) |
| On the Week | +22%, best week since March 2024 (from ~$63,100) |
| Weekly High | $79,463 (Fri Aug 21) |
| From All-Time High | ~39% (peak $126,198) |
| July CPI | 3.4% (from 3.5%); core 2.5% |
| Spot ETF Flows | +$1.92B across five sessions (Aug 17-21) |
| Short Liquidations | ~$3B on the breakout |
| CLARITY Cloture Vote | Sept 15, 2:15 pm ET (Polymarket ~17-20%) |
| BIP-110 | chain frozen at two blocks; proposal marked Closed |
What to Watch Next Week
Jackson Hole, August 27 to 29. The symposium's theme this year is "Financial Innovation: Implications for Payments and Policy," the first time the Fed's marquee event has been framed around fintech. Chair Warsh speaks, and Butterfill's $80,000 boundary likely waits on his tone.
The eCash fork. A separate hard fork is targeted at block 964,000, due within days. It credits holders one-for-one on a new chain but also reassigns roughly 500,000 dormant Satoshi-era coins, its most contested feature. Existing Bitcoin and the main chain are unaffected, and BlackRock's IBIT prospectus states the fund permanently abandons forked assets.
Whether the inflows hold. Five green ETF sessions is the best run since July, but Friday's inflow was half of Thursday's. Follow-through, not the peak, is the tell.
The September gauntlet. CPI on the 11th, the CLARITY cloture vote on the 15th, the Fed on the 16th. Three days that will define the fall.
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Bitcoin Weekly is published every week by 21VOX. Written by Karl. No financial advice. Just signal.