Treasury's Bond Buyback Plan Sends Bitcoin Soaring Past $67,000
Bitcoin and gold prices skyrocketed this week after a surprise announcement from the Treasury Department. On Wednesday, the department announced plans to significantly increase its buybacks of long-term Treasurys, or government debt, which sent bond markets into a frenzy.
The move was intended to calm bond markets but raised questions about whether the government is trying to push borrowing costs lower despite inflationary pressures. The national debt surpassed $40 trillion on the same day as the announcement, fueling anxiety over inflation and the value of the U.S. currency.
Investors fled the dollar and Treasurys, pouring money into alternative assets like gold and bitcoin instead. Gold rose more than 2% on Wednesday, while bitcoin jumped 20% for the week, with prices blasting through a key level of $67,000.
The Treasury's actions negatively affected investors who had shorted bitcoin or bet against its price, forcing them to close their positions and adding upward pressure to the cryptocurrency's price. By Friday, more than $4 billion in bearish crypto positions had been liquidated during the rally, according to CoinGlass.