Bitcoin storms $79,000: signal from the US Treasury flips market sentiment
The cryptocurrency market has received a powerful growth driver. The head of the U.S. Department of the Treasury signaled that the government bond buyback program could be significantly expanded, which was immediately reflected in Bitcoin's price. The leading cryptocurrency updated its local high, rising above the $79,000 mark.
On Thursday, the U.S. Treasury Secretary suggested that the volume of Treasury buyback operations could exceed the previously set limit of $4 billion per transaction. Notably, this threshold was approved just a day earlier, but it is now being viewed not as a hard cap, but rather as a starting point for further action.
The scale of intervention is impressive
Recall that on August 19, the department decided to double the minimum buyback volume for long-term bonds — from $2 billion to $4 billion per operation, focusing on securities with maturities ranging from 10 to 30 years. The first transactions under the updated program will begin on September 9.
However, as the Secretary emphasized, $4 billion is not the maximum figure. "The amount could exceed $4 billion per issue," he stated, noting that the final volume will depend on market conditions. The program's goal is to restore market depth, which has become "thin" amid large-scale corporate placements and weak liquidity in the 30-year securities segment.
Why this matters for Bitcoin
The mechanism of influence on the crypto market is not direct, but indirect — through bond yields and the volume of free liquidity. The yield on 30-year securities recently reached highs not seen since 2007, but after the buyback announcement, it sharply declined. The Treasury's intervention eased conditions in financial markets, which traditionally boosts appetite for risk assets.
Low yields on long-term bonds weaken competition for investor capital. During such periods, funds typically flow into Bitcoin and gold. Notably, this week, the precious metal also rose in price.
Bitcoin, in turn, responded with a rapid surge. At one point, the asset rose above $79,000, although it corrected to around $77,420 by the end of the session. The rally is supported by short position liquidations and a new wave of optimism in the crypto market.
It is worth noting that the effect of the Secretary's words was short-lived — yields on 10-year securities rose again toward the close of trading. Nevertheless, if the expanded buybacks starting on September 9 are fully implemented, this could become a long-term positive factor for digital assets.
My verdict: the Treasury Secretary's statement is a classic "dovish" signal that the market received with enthusiasm. However, the sustainability of Bitcoin's growth will depend on the actual volumes of operations. If the Treasury continues to scale up intervention, we could see a firm break above $80,000. Otherwise, the current surge risks being local.