Treasury's $6 Billion Buyback Fails to Lift Bitcoin
The US Treasury Department's move to increase liquidity-support buybacks for longer-dated government debt has had a different impact on Bitcoin this time around.
Last month, the Treasury doubled the maximum size of these buybacks from $2 billion to $4 billion per operation, and Bitcoin's price surged as a result. The 10-year Treasury yield dropped, making it easier for financial conditions and reducing the appeal of bonds.
This time around, the Treasury tripled the maximum size of liquidity-support buybacks to $6 billion, but Bitcoin remained flat, even dipping below $78,000. The 10-year Treasury yield jumped to its highest level in almost three years, reaching 4.85%.
The main difference between the two announcements is that this time around, there was no surprise in the move. Wall Street estimates had already expected a larger increase, and the market reaction was muted as a result. Additionally, the macro environment has deteriorated significantly since last month's announcement, with oil prices surging and inflation fears on the rise.