The US Treasury just doubled down on its buyback program for longer-dated securities, and Bitcoin wasted no time reacting. On August 19, the Treasury announced it would raise the cap on buyback operations targeting 10- to 30-year bonds from $2 billion to at least $4 billion per operation, effective September 9 through November 4.
Bitcoin surged roughly 6% intraday following the news, pushing toward the $69,000 to $70,000 range. More than $1 billion in short positions were liquidated in the process.
Why Treasury buybacks matter for Bitcoin
When the Treasury buys back its own bonds, it injects cash into the financial system and puts downward pressure on long-term yields. Lower yields make risk assets more attractive because the opportunity cost of holding something like Bitcoin, which pays no interest, shrinks.
The 30-year Treasury yield had recently peaked at 5.34%, a multi-year high that was squeezing risk assets across the board. The buyback expansion is essentially the Treasury stepping in to relieve some of that pressure, absorbing supply in maturities where the market had become congested.
