The U.S. Treasury triggered a broad macro repricing on August 19 by doubling the size of its long-end liquidity buyback operations. From September 9 through November 4, purchases of 10-to-20-year and 20-to-30-year nominal coupon securities will rise from $2 billion to at least $4 billion per operation. Treasury officials framed the move as a liquidity effort for older off-the-run bonds, not as monetary stimulus, but markets treated it as a form of fiscal accommodation.
Long-dated Treasury yields fell as much as 10 basis points, with the 10-year yield dropping about 6 basis points to 4.66%. The U.S. dollar index lost 0.84% to 98.80, gold jumped 4.05%, and Bitcoin climbed as much as 8.7% to an intraday high of $69,749 — its largest daily move since March 4. Ether rose 10.13%. The reaction showed Bitcoin trading as a liquidity-sensitive risk asset: lower yields and a weaker dollar reduced the opportunity cost of holding it.
Positioning amplified the move. According to CoinGlass data, $1.16 billion worth of crypto shorts were liquidated within one hour, including $673.73 million in Bitcoin positions. The squeeze followed the Treasury announcement and also came after the SEC proposed a registration exemption for certain crypto-asset issuers on August 18, alongside a White House meeting with crypto and financial regulators on August 19.
However, scale matters. The Treasury market is roughly $32 trillion, and Reuters noted that the planned $83 billion of quarterly purchases represents only a small fraction. Analysts cautioned that while buybacks can improve liquidity and shift positioning, they do not eliminate the fiscal and supply factors behind rising yields. On August 18, yields had risen despite a $2 billion buyback of 20-to-30-year bonds.
Glassnode observed that before the rally, Bitcoin was near cyclical lows around $60,000 to $65,000 while 10-year yields neared 4.7%. The Short-Term Holder Cost Basis stood at $68,500, below the True Market Mean of $75,800 — a setup previously seen during capitulation events. The Realized Profit/Loss ratio was 0.75, still above the sub-0.5 zone often associated with seller exhaustion.
Separately, the FOMC minutes from July revealed rare dissent: Lorie Logan, Beth Hammack, and Neel Kashkari voted against holding rates and favored a 25-basis-point increase. Markets largely ignored the hawkish tone as backward-looking because later data pointed to moderating inflation and a softening labor market.
Macro commentators reinforced the link between Treasury debt management and crypto liquidity. Arthur Hayes, CIO of Maelstrom, had argued that Treasury buybacks could reduce long-term yields. “I believe Bessent will use buy backs to purchase 10-year treasuries, thus reducing the yield.” A Bank for International Settlements working paper covering 184 countries found that cross-border flows of Bitcoin, Ether and major stablecoins reached about $2.6 trillion near the end of 2021, driven by global volatility, credit spreads, and funding conditions.
September 9 now carries added significance. If the larger buybacks consistently support liquidity at the long end, compress yields, and weaken the dollar, Bitcoin’s jump may be seen as an early response to easier global financial conditions. If yields resume rising, the episode may be remembered as a powerful short squeeze rather than the start of a liquidity-driven recovery.
