Bitcoin Rallies as Treasury Buybacks Fail to Tame Yields

Bitcoin and gold have surged since U.S. Treasury Secretary Scott Bessent expanded the government’s bond buyback program, even as the policy has failed to significantly lower long-term Treasury yields.

On Aug. 19, Bessent announced that the Treasury would increase buybacks of 10-, 20- and 30-year bonds to at least $4 billion per operation, doubling the previous $2 billion limit. The measure was designed to improve liquidity in the Treasury market as long-term borrowing costs hovered near levels not seen since 2007.

Instead of triggering a sustained bond rally, the announcement fueled demand for hard assets. Bitcoin climbed close to $80,000, helping spark billions of dollars in crypto short liquidations, while gold and silver also advanced.

Sygnum Chief Investment Officer Fabian Dori said the move highlighted the government’s growing focus on managing U.S. debt costs. While Treasury buybacks are not quantitative easing or money printing, the policy signal has strengthened concerns about currency debasement and encouraged investors to seek scarce assets such as Bitcoin and gold.

Treasury yields, however, remain stubbornly elevated. The 30-year yield has hovered around 5.25%, compared with an Aug. 19 low of 5.19% and the 5.33% reached a day earlier, its highest level since 2007. The 10-year and two-year yields have shown a similar lack of sustained improvement.

Investors remain concerned about the U.S. national debt, which has surpassed $40 trillion, persistent federal deficits and the prospect of increased Treasury issuance. Higher oil prices linked to ongoing Middle East tensions are also adding to inflation worries.

Saxo Bank commodity strategist Ole Hansen said buybacks may improve liquidity temporarily but do little to resolve the fiscal and inflation risks driving long-term yields higher.

For Bitcoin, elevated yields traditionally create competition because Treasuries offer investors income while BTC and gold do not. However, markets may increasingly view high yields driven by debt and inflation fears differently.

If investors expect further government intervention or long-term dollar debasement, Bitcoin and gold could continue attracting capital as alternative stores of value despite persistently high Treasury yields.