Treasury Buyback Boost Fails to Stir Bitcoin as Macro Environment Deteriorates
The US Treasury Department's latest move to triple the size of its long-term bond buybacks from $2 billion to $6 billion was expected to boost Bitcoin's price, but it didn't.
This is not the first time the Treasury has increased liquidity-support buybacks for longer-dated government debt. In August, when they doubled the maximum size from $2 billion to $4 billion, Bitcoin's price surged by over 15% in a matter of days, reaching nearly $80,000.
However, this time around, despite the increase in buyback size, Bitcoin's price dipped below $78,000 and has struggled to reclaim that level since. The main difference between the two announcements was the lack of surprise this time around - markets had been expecting a larger increase in buybacks.
The current macro environment is also contributing to the lackluster response from Bitcoin. Oil prices have surged by over $100, inflation fears are high, and the Federal Reserve's hawkish stance has raised expectations that interest rates could be hiked on September 16.