US Treasury Policy Fuels Bitcoin Surge, Growth Stocks Next?

Nigel Green, CEO of deVere Group, believes that the recent surge in Bitcoin's price is not just a crypto story, but rather a reflection of US Treasury policy and its impact on growth stocks. The US Treasury has announced plans to double its long-term bond buybacks to $4 billion per session, targeting 10-year, 20-year, and 30-year debt after yields hit their highest levels in two decades.

This move is seen as a promise of more liquidity to come, which has caused Bitcoin's price to rise by 18% in just 48 hours. The cryptocurrency cleared $70,000 for the first time since late May, with some market analysts attributing this surge to the easing of pressure from an overheated AI trade and a jumpy Middle East.

Green argues that Washington's support for the crypto industry is also contributing to the uptrend, particularly Trump's meeting with major crypto industry names at the White House. While the Clarity Act may not pass this session, Green believes that the president's public courting of the industry has created a new narrative that markets are pricing.

The same yield relief that lifted Bitcoin is expected to lift growth stocks, especially semiconductor and tech stocks that fell during the recent sell-off. These names were hammered hardest by rising 30-year yields, which put pressure on their high valuations. With yields now capped, investors should expect a floor under these growth equities.

Green warns that this correlation is not a long-term fix for debt positions and that yields can climb back up if issuance outruns the Treasury's ability to absorb it. However, he believes that investors should be watching the yield curve rather than individual tickers.