US Treasury's Bond Buyback Expansion Sparks Crypto Surge

The US Treasury's announcement to expand its long-term bond buyback programme has sent shockwaves through financial markets, sparking a surge in cryptocurrency prices.

On Wednesday, Bitcoin (BTC) climbed above $68,500, while Ethereum (ETH) jumped nearly nine per cent. Solana rose seven per cent, and XRP added roughly four per cent, according to trading data cited by Benzinga.

The Treasury's decision to increase liquidity support buybacks of longer-dated nominal coupon securities from a maximum of $2 billion per operation to at least $4 billion has been met with concern from economists. Peter Schiff argued that the buybacks amount to the Treasury absorbing bonds that private investors no longer want, funded indirectly through the Federal Reserve.

Analysts at TD Securities suggest that the move is pushing real interest rates lower, benefiting both gold and cryptocurrencies. Traders have described the expansion as a form of 'QE Lite,' implying that the central bank's room to tighten further is now constrained.