Bitcoin Tops $69,500 After Treasury Doubles Long-Dated Buybacks

On Aug. 19 the U.S. Treasury said it will raise the maximum size of its liquidity-support operations for 10- to 20-year and 20- to 30-year securities from $2 billion to at least $4 billion per operation. The change takes effect Sept. 9 and runs through Nov. 4. The department wrote the larger repurchase operations are intended to improve liquidity in longer-dated nominal sectors where market participants have consistently offered more debt than the Treasury has been willing to repurchase.

The announcement reduced pressure at the long end of the Treasury curve. The 30-year yield fell from a recent peak near 5.34% to about 5.19%, while the 10-year yield dropped to roughly 4.647%. The gap between the 2- and 30-year yields narrowed sharply as investors adjusted expectations for long-term borrowing costs.

Cryptocurrencies reacted quickly. Bitcoin climbed from an intraday low near $64,100 to over $69,000 before retracing to around $68,000. Ethereum rose as high as $2,100, breaking above $2,000 for the first time since June. Derivatives data showed more than $1.2 billion in crypto positions liquidated within one hour, and over 110,000 traders were liquidated for more than $1.45 billion in the past 24 hours. Short positions accounted for roughly $1.29 billion of those losses. The largest single liquidation reported was a $32 million ETH-USD position on the Bitget exchange.

The Treasury distinguished its repurchase operations from Federal Reserve asset purchases. Fed purchases expand the central bank’s balance sheet and create reserves. Treasury buybacks are designed to improve liquidity in existing securities and do not reduce the government’s overall debt burden.

The change follows a repricing at the long end of the curve as investors demanded greater compensation for inflation amid heavy government borrowing and increased corporate issuance, including borrowing tied to artificial-intelligence investment.

Andre Dragosch, head of research at Bitwise Europe, described Bitcoin as ‘the canary in the macro coal mine that anticipates changes in financial conditions both to the downside AND upside.’ Matt Cole, chairman of Bitcoin treasury firm Strive, argued persistent federal deficits and rising debt force policymakers to choose between tolerating higher real rates or supporting liquidity and nominal growth, and added, ‘There is no painless path. The question is simply where the adjustment gets absorbed.’ Cole also suggested prolonged dollar weakness could provide a long-term tailwind for Bitcoin.