How a Treasury buyback tweak helped bitcoin surge 25% to nearly $80,000 in days
Bitcoin prices surged past $78,000 following a U.S. Treasury announcement to increase bond buyback operations. While the buyback is intended to manage debt liquidity rather than stimulate the economy, the resulting drop in bond yields has made riskier assets like Bitcoin more attractive to investors.
Why it matters
This demonstrates the sensitivity of volatile digital assets to traditional macroeconomic policy shifts and the inverse relationship between Treasury yields and crypto market performance.
The U.S. Treasury said it would double the size of its buyback operations in the longest-dated government bonds, to $4 billion from $2 billion per operation. The announcement helped push the 30-year Treasury yield down from 5.34%, a 19-year high, to around 5.19%.
Bitcoin jumped about 25% since Wednesday and surged past $78,000 as of Asian morning hours Saturday, with roughly $4 billion in bearish crypto positions liquidated on Thursday and Friday as prices rose.
A Treasury buyback involves the government buying previously issued bonds back from investors, a program mainly designed to make older Treasury securities easier to trade and help the government manage the composition of its debt. Importantly, this is no quantitative easing, where the Federal Reserve creates reserves to purchase assets in an effort to loosen financial conditions.
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