Treasury's Bond Band-Aid Fuels Bitcoin Surge
The US Treasury's intervention in long-term bond markets had an unexpected effect on cryptocurrency prices. Secretary Scott Bessent announced that the Treasury would double its buybacks of 10- to 30-year debt, which initially led to a collapse in yields. However, this relief was short-lived, and by Friday, yields were back near their pre-announcement levels.
JPMorgan called the move a 'band-aid' without underlying fiscal consolidation, while Evercore ISI flagged the risk of a 'slippery slope' if Bessent starts defending specific yield levels. Despite this, the bond intervention delivered one clear beneficiary: crypto. Bitcoin surged from around $63,000 on Monday to above $77,000 by Friday morning, a roughly 23% weekly gain, its best week since 2023.
The rally in Bitcoin was fueled by President Donald Trump's push for Congress to pass the Clarity Act and a record short squeeze of $2.7 billion in bearish crypto bets. This mechanical acceleration of the move added to the optimism around cryptocurrency prices.