U.S. Treasury bond buyback program triggers $4B+ in crypto short liquidations, pushing Bitcoin above $62K–$67K.
Macro & Markets ·
A surprise expansion of U.S. Treasury long-term bond repurchases announced Wednesday sparked a dollar sell-off that reverberated across risk assets. Bitcoin surged above $77,000 by Friday, while gold climbed to $4,661, as investors rotated away from traditional holdings into alternative stores of value. The Treasury's move, aimed at stabilizing bond markets after a sustained sell-off, coincided with heightened concerns over the national debt—which crossed $40 trillion the same day—and lingering inflation pressures driven partly by geopolitical tensions and energy costs.
The moves exemplify what traders call the "debasement trade," in which weakness in yields and currency values redirects capital toward assets perceived as hedges. Bitcoin jumped over 20% during the week, a rally that liquidated more than $4 billion in short positions, according to CoinGlass data cited in market reports. The cryptocurrency had been range-bound below $67,000 for weeks before the Treasury announcement.
What remains unclear is whether the rally will persist or whether it depends on sustained dollar weakness and lower Treasury yields. The Treasury intervention raises questions about whether official action may suppress borrowing costs despite inflationary headwinds, a dynamic that could constrain Federal Reserve policy.