Bitcoin Soars on US Treasury Bond-Buyback Strategy Shift

Bitcoin surged above $78,000 on Friday as investors reacted to a significant shift in the US Treasury's bond-buyback strategy. The move involves doubling the size of planned purchases of longer-dated government bonds.

The Treasury will increase buybacks of 10- to 30-year debt to at least $4 billion per operation, up from $2 billion. This program is scheduled to begin on September 9 and aims to improve liquidity in the long-term bond market by buying older, longer-term securities.

Market reaction was notable, with long-term US Treasury yields falling and the US dollar weakening. Both trends typically support risk assets, including cryptocurrencies. The Treasury intervention has not solved the underlying bond-market problem, however, as long-term yields rose again after their initial decline, reflecting persistent concerns over inflation, fiscal deficits, and heavy government borrowing.

This makes Bitcoin's rally vulnerable if yields continue climbing. For now, investors are trading the signal rather than simply the policy mechanics.