Bitcoin tops $80K as Treasury eyes $950B for buybacks

Bitcoin topped $80,000 as U.S. Treasury officials consider tapping roughly $950 billion in the Treasury General Account to fund expanded buybacks of long-term government bonds. Two senior Treasury officials said the cash could be used to support larger purchases, but they did not provide amounts or a timeline.

On Aug. 19 the Treasury announced it would double liquidity-support buybacks for 10- to 30-year securities to $4 billion per operation from $2 billion, effective Sept. 9 through Nov. 4. Treasury Secretary Scott Bessent said purchases could rise above $4 billion and described the operations as an attempt to improve liquidity in parts of the market strained by thin summer trading and heavy corporate issuance. The department has not yet executed the larger purchases; the expanded operations are scheduled to begin in September.

The Treasury market has seen sharp swings. The 30-year Treasury yield reached 5.337%, a level last seen in 2007, then fell to about 5.18% after the buyback expansion was announced and later moved back; on Monday the 30-year traded near 5.24% and the 10-year near 4.70%. Traders have noted the volatility reflects uncertainty about whether announced interventions will lower long-term borrowing costs.

Drawing from the Treasury General Account would return cash held at the Federal Reserve to the banking system. Financing purchases by issuing short-term Treasury bills would instead absorb liquidity from investors. Officials say the TGA balance is near $950 billion, above the administration’s target range of roughly $550 billion to $600 billion, but they have not suggested the full balance would be used. The TGA must cover federal payrolls, contractor payments and interest, and any large drawdown would need replenishment through tax receipts or additional borrowing. The Treasury cannot create reserves the way the Federal Reserve can.

Federal debt recently passed $40 trillion, including about $32.3 trillion held by the public, and rising yields are increasing interest costs. Private-sector supply has also climbed: U.S. technology companies have issued about $220 billion of debt this year to fund artificial intelligence projects, adding to supply pressure in a market already absorbing heavy government borrowing.

Cryptocurrencies and precious metals moved alongside the bond-market developments. Bitcoin rose more than 4% over 24 hours and is up about 27% in August. Gold gained and the dollar weakened amid investor attention to possible yield suppression.

Matt Cole, chief executive of Strive, said the cryptocurrency’s advance against both the dollar and gold strengthens the bull case for bitcoin. André Dragosch, head of research at Bitwise Europe, warned that a crypto sentiment index briefly hit its highest level since late 2024 and that a pullback or consolidation appears likely even as the recovery continues.

Robin Brooks, a senior fellow at the Brookings Institution, said the prospect of using the TGA would reinforce expectations that policymakers might cap yields, a perception that could put pressure on the dollar and support precious metals.

Federal Reserve officials have maintained a separate policy focus on inflation and employment. Investors will watch upcoming speeches at the Jackson Hole meeting, including one by Federal Reserve nominee Kevin Warsh, for any signals on monetary policy and the Treasury market.

Treasury officials said regular debt auctions will continue as planned, including sales of longer-dated notes, and that further changes could be considered at the next quarterly refunding.