The Same US Treasury Move Sent Bitcoin From $65K to $80K

The Same US Treasury Move Sent <a href="https://xpertsstudio.com/bitcoin-ethereum-and-xrp-price-predictions-today-why-is-crypto-falling/” title=”Bitcoin, Ethereum and XRP Price Predictions Today: Why Is Crypto Falling?”>Bitcoin From $65K to $80K – So Why Didn’t It Work This Time?

The US Treasury said it would actually triple the size of its long-term bond buybacks – why didn’t it push BTC north again?
ByJordan Lyanchev

It was less than a month ago when the US Treasury Department announced it would double the maximum size of liquidity-support buybacks for longer-dated government debt.

Bitcoin’s price reacted at the time with an immediate leg up. The Treasury now said it would triple it to $6 billion, but BTC remained flat and even dipped. So, what changed?

Same Move, Different Reaction

On August 19, the Treasury Department’s Scott Bessent unexpectedly announced that the institution would at least double liquidity-support buybacks for longer-dated government debt from $2 billion to $4 billion per operation. Financial markets reacted immediately, with BTC and gold leading the surge. Meanwhile, long-term Treasury yields dropped.

The Treasury did it again yesterday, increasing the upcoming buyback to $6 billion. However, the 10-year Treasury yield jumped to 4.85%, its highest level in almost three years. The 20-year and 30-year yields also increased to about 5.30%. In contrast, the primary cryptocurrency not only didn’t rally as it did the last time, but actually dipped below $78,000 and has barely been able to reclaim that level since.

Why No Surge?

Perhaps the most notable difference between the announcement on September 9 and August 19 was the lack of actual surprise. Treasury’s move from last month represented an unexpected policy shift, and markets repriced the possibility that it was becoming more willing to intervene as long-term borrowing costs surged. In contrast, the increase to $6 billion in buybacks doesn’t appear to be enough as Wall Street estimates had stretched toward up to $10 billion following Bessent’s comments.

In addition, the macro environment continues to deteriorate. Oil prices surged $100 as the US-Iran war continues, and inflation fears are through the roof. Last week’s strong employment data and Kevin Warsh’s hawkish stance the previous Friday have simultaneously raised expectations that the Federal Reserve could hike interest rates on September 16.

Source: cryptopotato.com