US Treasury to at Least Double Bond Buybacks, Adding to Bitcoin Momentum

The U.S. Treasury is set to sharply increase its bond buybacks, a move that could bolster risk assets including Bitcoin.

Bloomberg reported on Aug. 19 that the Treasury said in a statement it would expand buybacks by at least twofold to support liquidity in long-term debt, including Treasuries with maturities of 10 to 30 years.

The buyback program allows the Treasury to repurchase outstanding government debt before maturity and retire it. It is a debt-management tool used to improve market liquidity and repay borrowing early.

After the announcement, 30-year Treasury prices jumped and the yield fell nearly 10 basis points to 5.19%. Bond prices and yields typically move in opposite directions.

Treasury Secretary Scott Bessent said last year that the department could use policy tools including buybacks to stabilize the Treasury market.

Some analysts say the larger buybacks could also lift Bitcoin prices. Spot On Chain said the measure would inject liquidity directly into the long-term Treasury market and ease financial conditions.

Bitcoin and other risk assets have typically risen when the Treasury intervenes, Spot On Chain said.

The Treasury's bond purchases could also provide an additional fundamental tailwind to Bitcoin's existing upward momentum, it added.