The US Treasury Department announced on August 19 a doubling of its long-term debt buybacks from $2 billion to $4 billion per operation. This unexpected decision had pushed down Treasury yields and boosted bitcoin, which reached $80,000. On September 9, the Treasury raised this cap to $6 billion, but the 10-year Treasury yield climbed to 4.85%, its highest level in nearly three years, while bitcoin failed to hold the $78,000 level. The crucial difference lies in the lack of surprise: Wall Street had estimated potential buybacks at up to $10 billion, making $6 billion insufficient. The macroeconomic environment has also deteriorated significantly with oil prices surging to $100, inflation fears, and expectations of a Fed rate hike. In reality, it was not the buybacks themselves that had boosted bitcoin in August, but the immediate effect of the announcement on yields and liquidity expectations.
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