Bitcoin ETF Inflows Soar as Treasury Buybacks Spark Crypto Rally

Bitcoin spot ETFs are experiencing their strongest comeback of the year after several months of sluggish demand. Over an eight-day period, funds saw about $2.8 billion in inflows, with a significant surge when Bitcoin broke above the $80,000 mark.

The Treasury's decision to boost long-end liquidity-support buybacks coincided with this price action. Market strategist Jonathan Rose attributes Bitcoin's rebound to Treasury buybacks and declines in long-term interest rates and the dollar.

ETF buying picked up before the Treasury's instructions were issued, with $297.5 million inflowing on August 17 and $189.3 million the next day. Payments then soared to approximately $517.2 million on August 19 and $606.3 million the following day.

The Treasury will double the maximum size of liquidity-support buybacks for long-dated nominal securities from September 9 through November 4, aiming to improve market functioning without sparking quantitative easing.