US Treasury Debt Buybacks Send Bitcoin Soaring
Bitcoin (BTC) surged to an 11-week high on Wednesday after the US Treasury doubled its debt buyback size to at least $4 billion. This move is expected to fuel a broader risk-asset rally, but experts caution that a lack of stablecoin liquidity may limit Bitcoin's price upside.
Data from TradingView showed BTCUSD pass $69,749 on Bitstamp, up 6% on the day. The US Treasury plans to increase its debt buyback operations from $2 billion to at least $4 billion per operation, starting September 9th.
As a result of this decision, US bond yields fell, with the 30-year yield decreasing by 9 basis points to 5.19%. Peter Boockvar, chief investment officer at One Point BFG Wealth Partners, noted that 'this is NOT a debt paydown, it is just a rearrangement of the maturity schedule of Treasuries.'
However, analysts warn that stablecoin liquidity remains low, with supplies on exchanges decreasing by $14 billion since May. Bitfinex stated that 'until stablecoin supply turns, the rally stays unfunded,' highlighting the importance of stablecoin liquidity in supporting crypto assets.