Bitcoin · Federal Reserve (FED) · U.S. Treasury · CryptoSlate
Bitcoin’s runs into a weird new macro reality as the Fed turns off the tap and Treasury opens the floodgates
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Bitcoin's current rally started when the Treasury Department announced on Aug. 19 that, beginning Sept. 9, it would at least double the maximum size of certain buyback operations for government bonds with 10 to 30 years left to maturity, raising the cap from $2 billion to $4 billion per operation.
Key facts
- The difference becomes easier to see at full scale because Treasury's Aug
- Treasury expects $739 billion of privately held net marketable borrowing from July through September, followed by another $628 billion from October through December
- Bitcoin is +0.19% over the past 24 hours and currently sits at rank # 1 by market cap
- The 30-year Treasury yield closed at 5.28% on Aug. 18, fell to 5.19% on the announcement day, then returned to 5.27% by Sept. 2, according to the Treasury's daily yield data
Summary
01 Treasury doubled the cap on selected long-term bond buybacks as Fed minutes showed officials still considering higher interest rates. 02 The opposing moves highlight how the Fed controls short-term money while Treasury manages debt composition without controlling long-term yields. 03 Buybacks may improve trading in older bonds, but heavier issuance and elevated real yields continue to shape markets and Bitcoin’s opportunity cost. Simply put, the Treasury was offering to buy more older long-term bonds from dealers that wanted to sell them.