U.S. Treasury purchases $5.2 billion of long‑dated bonds as Bitcoin ETF outflows persist

The U.S. Treasury completed its first operation under an expanded buyback program on September 10, acquiring $5.187 billion of long‑dated, off‑the‑run government bonds. The move was intended to improve liquidity in older Treasury issues, but immediate market signals showed little relief for Bitcoin investors.

Bond market reaction

Following the purchase, the Treasury’s daily nominal yield curve saw the 10‑year yield rise 12 basis points, from 4.83% to 4.95%. The real‑yield curve, which adjusts for expected inflation, also climbed, with the 10‑year real yield increasing 9 basis points, from 2.46% to 2.55%. Higher real yields raise the return hurdle for a non‑yielding asset such as Bitcoin.

Bitcoin ETF flows

On the same day, U.S. spot Bitcoin exchange‑traded funds (ETFs) posted a net outflow of about $282 million, according to Farside Investors. ETF flows reflect regulated‑fund demand and did not indicate any easing of funding conditions for Bitcoin.

Details of the Treasury buyback

• Off‑the‑run securities offered: $10.489 billion against a $6 billion ceiling.
• Accepted issues: 23 of 40 eligible bonds maturing between February 2037 and August 2046.
• The Treasury acts as a price‑sensitive buyer, retiring accepted securities after settlement rather than conducting a Federal Reserve‑style monetary purchase.

Broader macro backdrop

Other market forces on September 10 included a 0.4% rise in final‑demand producer prices in August and a 4.2% jump in energy prices, suggesting persistent inflation pressure. The European Central Bank also raised its key rates by 25 basis points, adding to the higher‑rate environment.

Implications for Bitcoin

For Bitcoin to experience funding relief, two conditions would need to align: lower real yields and sustained inflows into spot Bitcoin ETFs. As of the post‑operation reading, neither condition had materialized. Bitcoin’s price hovered near the $76,000 support level, with a reference close of $76,568 before modestly recovering to around $77,800.

What to watch next

The upcoming U.S. consumer‑inflation report (scheduled for September 11) will be a key test. A cooling inflation surprise could push nominal and real yields lower, while an upside surprise could reinforce the current higher‑yield backdrop.