Bessent's Bond Moves Strengthen Bitcoin Case
US Treasury Secretary Scott Bessent's recent actions have strengthened two of the strongest arguments for Bitcoin (BTC), according to Bitwise CIO Matt Hougan.
In a move that could support BTC's long-term appeal, Bessent initially announced plans to increase Treasury purchases of long-dated bonds from $2 billion to $4 billion. However, this intervention failed to keep long-term yields down.
The 30-year Treasury yield briefly fell from 5.29% to 5.20%, while the 10-year yield dropped from 4.70% to 4.65%. But these declines were short-lived, and Hougan noted that Bessent went on CNBC suggesting that Treasury's buybacks could eventually exceed $4 billion.
Hougan stated that rather than retreating, Bessent announced the possibility of using nearly $1 trillion from the Treasury General Account to fund larger buybacks. This move drew strong criticism from prominent investors like Ray Dalio and Stanley Druckenmiller, who described it as 'price management' and a 'mistake far larger than $4 billion suggests.'
Economist Mohamed El-Erian also compared this policy experiment with Japan's unsuccessful experience with yield-curve control. Hougan argued that attempts to suppress long-term interest rates can push investors toward scarce assets such as Gold and Bitcoin, as governments intervene in financial markets.