Treasury's Bond Buybacks Send Dollar Plummeting, Boost Bitcoin
Bitcoin and gold both saw significant gains this week after the US Treasury Department announced plans to increase its buybacks of long-term Treasurys, causing a sell-off in the dollar.
The move by Treasury Secretary Scott Bessent aimed to calm bond markets but raised concerns about whether the government is trying to push borrowing costs lower despite inflationary pressures.
As investors moved away from the dollar and into alternative assets, gold rose above 2% on Wednesday and bitcoin surged more than 20% for the week.
The price of bitcoin had been stuck between $62,000 and $67,000 for weeks, but the Treasury's actions caused yields to fall, leading to a surge in the cryptocurrency's price.
Many investors who had shorted bitcoin were forced to close their positions as the price rose, adding fuel to the rally.