Bitcoin jumped after the U.S. Treasury expanded its long-term Treasury buyback operations, reaching its highest level since June 2 after the U.S. stock market opened on Wednesday, according to Cointelegraph.
The Treasury said it will increase the size of those buybacks starting Sept. 9. The cap for each operation will be raised from $2 billion to at least $4 billion. Markets viewed the move as added liquidity support for the long-end bond market, and risk assets broadly moved higher.
After the announcement, the yield on the 30-year U.S. Treasury fell quickly, dropping about 9 basis points to 5.19% from levels that had been near a 20-year high. The Treasury said the larger buyback program is intended to meet persistent investor demand in the long-term Treasury market and improve market liquidity.
Analysts noted that the buybacks do not amount to debt reduction. Instead, they represent an adjustment to the maturity structure of U.S. government debt. With total U.S. debt nearing $40 trillion, markets are still watching fiscal strain and the risk of rising interest costs.
Bitfinex said Bitcoin’s recent rebound still faces limits because stablecoin liquidity remains insufficient. Data showed that stablecoin supply on exchanges has fallen by about $14 billion since May.
On-chain indicators pointed in the same direction. The Stablecoin Supply Ratio, which measures the relationship between Bitcoin’s market capitalization and the total market capitalization of stablecoins, has continued to rise. It moved from 9.82 on June 30 to 11.69, suggesting that liquidity conditions are still tight.
Analysts said improved expectations for U.S. fiscal liquidity could provide short-term support for Bitcoin and other risk assets. But without a clear return of stablecoin capital, any further upside would still need stronger fund flows to confirm it.