Treasury's Liquidity Injection vs. Fed Rate Hike: New Macro Squeeze for Bitcoin

The U.S. Treasury's recent decision to inject liquidity through expanded repurchase agreements has created a unique macroeconomic environment for Bitcoin.

Rising term premiums and fluctuations in real yields are reshaping the pricing logic for Bitcoin as a risk asset, according to Woofun AI.

The Federal Reserve has maintained high interest rates, while the U.S. Treasury injects substantial liquidity through large-scale repurchase operations, creating a stark policy divergence.

This shift began on August 19, when the U.S. Treasury announced an initiative to reshape the liquidity of long-term Treasury bonds by doubling the cap on repurchase operation sizes for government bonds with remaining maturities of 10 to 30 years.