Bessent's Unintentional Boost to Bitcoin's Neutral-Money Case
Bitcoin's neutral-money case has been strengthened by two unexpected events, according to Bitwise Chief Investment Officer Matt Hougan. The first event was Treasury Secretary Scott Bessent's decision to double purchases of long-dated bonds in periodic buybacks to $4 billion, which came on the heels of 30-year Treasury yields at their highest levels since 2007.
Markets interpreted this intervention as an attempt to suppress long-term borrowing costs, characterized by Hougan as a form of financial repression. Artificially suppressed yields can squeeze returns for savers while inflation erodes purchasing power, potentially boosting demand for scarce assets such as Bitcoin and gold.
Hougan noted that intentionally or not, the moves reinforce two of Bitcoin's strongest investment arguments: 'There is nothing Bitcoin likes more than a little financial repression.'
The initial impact on yields proved short-lived: the 30-year yield dropped from 5.29% to 5.20% and the 10-year yield from 4.70% to 4.65% after the announcement before reversing.