Summary
- The US Treasury said it would expand its Treasury buyback program by at least twofold.
- The measure would directly supply liquidity to the long-term Treasury market and ease financial conditions.
- It added that Treasury bond purchases could serve as an additional fundamental factor behind Bitcoin’s upward momentum.
Forecast Trend Report by Period
The US Treasury plans to at least double its bond buybacks, a move that could bolster risk assets such as Bitcoin.
Bloomberg reported on August 19 that the Treasury said in a statement it would expand buybacks by at least twofold to support liquidity in long-dated debt, including bonds with maturities of 10 to 30 years.
Under the program, the Treasury repurchases outstanding US government bonds before maturity and retires them. It uses the tool to improve market liquidity and manage debt by paying down borrowing early.
The announcement sent 30-year Treasury prices sharply higher, pushing the yield down nearly 10 basis points to 5.19%. Bond prices and yields typically move in opposite directions.
Treasury Secretary Scott Bessent said last year that the department could use policy tools, including buybacks, to stabilize the Treasury market.
The expanded buyback program could also lift Bitcoin prices, according to Spot On Chain. The firm said the measure would directly inject liquidity into the long-term Treasury market and ease financial conditions.
Risk assets such as Bitcoin tend to rise when the Treasury intervenes, it added. Treasury purchases of government bonds could also provide an additional fundamental driver for Bitcoin’s existing upward momentum.
