Bitcoin surged from $64,100 to nearly $70,000 on Aug. 19 after the US Treasury unexpectedly doubled its planned buybacks of long-dated government debt, triggering the liquidation of $1.4 billion in crypto short positions within four hours. The Treasury raised the maximum size of its liquidity-support buybacks for 10-to-30-year securities from $2 billion to at least $4 billion per operation, running from Sept. 9 through Nov. 4. The 30-year Treasury yield dropped from 5.34% to 5.19% while the 10-year fell to 4.65%, easing competition between long bonds and risk assets. Fed minutes released the same day showed a hawkish stance, with a 9-to-3 vote to hold rates at 3.50% to 3.75% and officials warning that additional tightening may be necessary if inflation fails to decline. Bitcoin hit its current level near the $69,031 200-day moving average, above Glassnode’s short-term-holder cost basis estimated at $68,500, though spot demand remains fragile with Coinbase’s premium still negative.
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