Bitcoin and the broader crypto market had several tailwinds last week, but Bitwise Chief Investment Officer Matt Hougan said the biggest catalyst came from U.S. Treasury Secretary Scott Bessent. In the piece, Hougan wrote that the U.S. Securities and Exchange Commission’s proposed Crypto Asset Regulatory Rule and positive signals from a White House meeting with crypto industry executives helped spark a sharp rally that squeezed short sellers. Even so, he said Bessent’s actions around Treasurys and the dollar-based financial system were what set off the most important move.
Long-term Treasury buybacks were the first trigger
Hougan said Bessent’s first major step was to announce a plan to intervene in the long end of the U.S. Treasury market. Last Wednesday, the Treasury said it would double its regular buybacks of long-dated Treasurys from $2 billion to $4 billion. At the same time, 30-year U.S. Treasury yields had climbed to their highest level since 2007.
By itself, Hougan said, the size of the operation was not especially large. The U.S. Treasury issues debt in the trillions of dollars each year, so a buyback measured in the low billions is small in comparison. What mattered, in his telling, was the signal. While Bessent described the move as a "liquidity management tool," markets interpreted it as an attempt to push down long-term rates, a form of financial repression.
Hougan argued that bitcoin tends to benefit from that kind of setup. If the government leans on long-term yields, savers earn less on conservative assets while inflation keeps eating into purchasing power. In that environment, capital often looks for scarce assets such as gold and bitcoin. He wrote that both rose after the announcement.
Market expectations shifted from $4 billion to nearly $1 trillion
According to Hougan, the initial move briefly worked. The 30-year Treasury yield slipped to 5.20% from 5.29%, while the benchmark 10-year yield fell to 4.65% from 4.70%. The drop did not last. Yields soon moved back toward prior highs.
He said that outcome showed how hard it is for a $4 billion buyback to move a market tied to roughly $40 trillion in outstanding debt. Bessent then signaled that buybacks could exceed $4 billion. When that still failed to calm the bond market, Hougan wrote, Bessent floated the idea that the Treasury could deploy nearly $1 trillion from the Treasury General Account for larger-scale repurchases.
In roughly 48 hours, Hougan said, market expectations shifted from a $2 billion liquidity operation to the possibility of using $1 trillion to support the long end of the Treasury market. That change jolted investors and put the issue of U.S. sovereign debt back in front of a wider audience.
Dalio, Druckenmiller and El-Erian weighed in
Hougan cited several high-profile reactions. Bridgewater founder Ray Dalio said investors should own gold and bitcoin. Macro hedge fund manager Stanley Druckenmiller criticized the move as "price controls" and said the negative effects would go far beyond the $4 billion figure. Economist Mohamed El-Erian compared the experiment to Japanese monetary policies that, in his view, had serious consequences.
Hougan said the debate pushed currency debasement back into the center of global macro discussion, and that bitcoin benefited from that narrative.
Bessent’s Iran comments raised the issue of dollar weaponization
Hougan also pointed to Bessent’s comments at a Monday press conference, where he announced what he called an "economic offensive" against Iran’s global financial channels. Bessent described the effort as a "Normandy landing in financial terms" and said the administration would work to sever Iran’s links to the global economy while sanctioning companies and related countries that do business with Tehran.
Hougan quoted Bessent as saying: "Any entity that facilitates money laundering for Iran will be kicked out of the dollar system. The countdown has begun."
For Hougan, the statement brought an underlying reality into plain view: access to the dollar financial system is a tool of U.S. power, and Washington is willing to use it.
Hougan tied the moment to market behavior after 2022
The article said the episode recalled the U.S. decision to freeze Russia’s foreign exchange reserves after the Russia-Ukraine conflict in 2022. Hougan wrote that the move helped set off a later rally in both gold and bitcoin.
His argument is that when payment systems become instruments of geopolitical pressure, markets start searching for neutral alternatives. He described bitcoin as the only monetary asset that can be self-custodied directly, is scarce, can move globally, and does not depend on the banking or custody system of any single political entity. Gold, he wrote, remains a strong store of value, but its weight and the difficulty of transferring and dividing it make it less practical for transactions.
Hougan ended by saying that the more the global financial system is used as a geopolitical tool, the more valuable a neutral financial network becomes. In his view, Bessent’s policy moves unintentionally strengthened two core bitcoin arguments in the span of a single week: softer yield-curve control can push capital toward hard assets, and the value of a neutral monetary settlement layer is rising.
He added that those developments are now sitting alongside continued global balance-sheet expansion, improving access channels for bitcoin, and broader adoption by large asset managers that are placing bitcoin into standard portfolio allocations. Together, he said, they form a strong backdrop for the asset.