Crypto Stocks Surge as $1 Billion Short Squeeze Forces Bearish Bets to Cover
Strategy and Coinbase Lead Rally With Over $1 Billion in Short Positions Liquidated
A market-wide short squeeze across crypto derivatives and heavily shorted equities drove a sharp rally in stock market proxies for digital assets on Wednesday, led by double-digit gains in Strategy and Coinbase as Bitcoin climbed toward $70,000.
Bitcoin treasury Strategy, which trades as MSTR, led the pack, up 11.95% to $103.58, while Coinbase (COIN) climbed 9.05% to $159.47. Stablecoin issuer Circle (CRCL) rose 9.44% to $78.50 and Ethereum treasury BitMine (BMNR) added 9.68% to $20.05, rounding out the move across Wall Street’s small cluster of crypto stocks.
Each stock touched a fresh intraday high during the session, with MSTR reaching $106.90 (+13.07% off its open), COIN $165.74 (+12.37%), CRCL $81.22 (+10.10%), and BMNR $20.90 (+12.79%), before paring portions of those advances into the closing bell.
Wednesday’s equity pop tracks Bitcoin’s own short squeeze toward $70,000, which liquidated more than a billion dollars in bearish crypto bets in a single hour. Market data from liquidation tracking service Coinglass showed that forced short liquidations made up the vast majority of derivative liquidations as price moves triggered automated buy-ins across crypto exchanges.
Strategy and Coinbase carry extra significance here: both have ranked among the most shorted large-cap stocks on Wall Street, with Coinbase being currently the fifth most shorted stock in the financial sector. That means today’s rally isn’t just crypto derivatives traders getting squeezed—equity short sellers betting against these two names are being forced to cover into a rising market as well.
The rally gained additional momentum after the U.S. Treasury announced it would at least double the size of its long-bond buyback program starting in September. The liquidity-easing move lifted risk assets broadly Wednesday, with the total crypto market capitalization expanding by more than 5% during the session.
Trading took place within hours of a White House meeting where President Trump was expected to meet with leadership from the SEC and CFTC alongside crypto executives to discuss market-structure rules, as well as the scheduled release of the Federal Reserve’s July meeting minutes.
The underlying asset exposure of the treasury firms remains central to the stock movements. Strategy held 840,447 BTC and $4.8 billion in cash as of its most recent weekly filing, while BitMine holds 5.82 million ETH tokens, valued at approximately $11.4 billion and representing 4.8% of Ethereum’s circulating supply, according to statement details from chairman Tom Lee.
Despite the single-session gain, Strategy, Coinbase, and BitMine remain down year-to-date, with trading focus turning to follow-through volume over upcoming sessions and whether spot Bitcoin can maintain position above the $70,284 resistance level.
