U.S. Treasury · Bitcoin · CoinDesk
How a Treasury buyback tweak helped bitcoin surge 25% to nearly $80,000 in days
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A relatively small change in the U.S. government bond market helped set off one of bitcoin's sharpest rallies in months this week, as falling long-term yields gave traders an excuse to unwind a record pile of bearish crypto bets.
Key facts
- 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
- 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 key technical test is whether Bitcoin can hold above its 200D MA, around $69k, and turn that level from resistance into support," Ko said
- Movements in the 10-year and 30-year Treasury yields have increasingly taken on a life of their own, rather than simply tracking expectations for what the Federal Reserve will do with short-term
Summary
Bitcoin surged about 25 percent past $78,000 after expanded Treasury buybacks helped lower long-term yields and triggered the liquidation of roughly $4 billion in bearish crypto positions. Falling Treasury yields can benefit bitcoin by reducing the appeal of relatively safe, interest-paying government debt, though analysts cautioned that the modest buyback program was a catalyst rather than a fundamental shift. About $650 million in weekly inflows to spot bitcoin exchange-traded funds supported the rally, while traders are watching whether bitcoin can remain above its 200-day moving average near $69,000. 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.