Bitcoin Surpasses $80,000 as Treasury Extends Long‑End Bond Buybacks

Bitcoin climbed above $80,000 on August 25, marking its strongest weekly gain in months. The rally followed the U.S. Treasury’s announcement that it would double the cap on certain long‑end bond buybacks to at least $4 billion per operation starting September 9.

Treasury’s bond‑buyback program

The Treasury said the enlarged limits will apply to purchases made between September 9 and November 4. The program is described as a liquidity‑support operation for older securities, not a monetary‑stimulus measure. In the current quarter the Treasury authorized up to $38 billion for liquidity‑support purchases and $25 billion for short‑maturity cash‑management buybacks.

Hayes’ bull‑market argument

Arthur Hayes, co‑founder of BitMEX, argued in an August 25 essay that the expanded buybacks add dollar liquidity, lower long‑term yields, and make risk assets such as Bitcoin more attractive. He compared the approach to earlier Treasury actions that moved money‑market balances out of the Federal Reserve’s overnight reverse‑repurchase facility.

Other drivers of the rally

• Spot Bitcoin ETFs recorded about $517 million of net inflows on August 19, the strongest daily intake since early May.
• Derivatives short liquidations accelerated the breakout, pushing Bitcoin above $71,000 after the Treasury announcement.
• A weaker U.S. dollar also supported the price rise.

Yield movements

Following the announcement, the 10‑year Treasury yield fell toward 4.65 % and the 30‑year yield moved toward 5.20 %, before partially recovering later in the day.

Speculative liquidity sources

Hayes mentioned the Treasury General Account (TGA), which held roughly $940 billion, as a potential source of additional dollar liquidity. He suggested a large TGA drawdown could further support Bitcoin, though no concrete plan has been announced.

Risk considerations

Hayes noted that his own fund, Maelstrom, had reached “maximum risk” exposure to Bitcoin, Ether, Ethena and Ether.fi, and warned that continued advances do not eliminate the possibility of sharp corrections.

Looking ahead

The first purchases under the new limits are expected on September 9. Treasury will review the program’s size in its next quarterly refunding on November 4, providing data for investors to assess any link between the buybacks, dollar liquidity, and Bitcoin’s price trajectory.