Treasury's Bond Buyback Plan Sparks Bitcoin, Gold Surge
Bitcoin and gold prices surged this week after a series of events triggered a sell-off in the US dollar. The Treasury Department announced plans to significantly increase its buybacks of long-term Treasurys, which led to a dollar sell-off and a jump in the value of gold and bitcoin.
The news came on Wednesday, when President Donald Trump also urged Congress to move quickly on crypto legislation, calling it crucial for keeping the US ahead of China. Treasury Secretary Scott Bessent's maneuver to lower long-term borrowing costs raised questions about whether the government is trying to push borrowing costs lower despite inflationary pressures.
The price of gold rose more than 2% that day, and bitcoin jumped over 20%. The cryptocurrency had been stuck between $62,000 and $67,000 for weeks before breaking through the upper level. Investors who had shorted bitcoin were forced to close their positions as prices climbed, adding fuel to the rally.
By Friday, more than $4 billion in bearish crypto positions had been liquidated during the rally, according to CoinGlass. The Treasury's actions negatively affected the money investors could make on US bonds and the dollar, boosting the value of bitcoin instead.