A US Treasury buyback filled its full $6 billion cap in 20- to 30-year bonds on Tuesday. Bitcoin (BTC) did not rally the way it did in August., in fact, it fell below the $80,000 mark.
Bitcoin traders who treated buybacks as a yield catalyst saw no such trigger. August’s rally followed a policy surprise, while Tuesday’s operation had sat on Treasury’s tentative schedule for weeks.
What Made August Different From Tuesday?
On August 19, Treasury said it would double its long-dated buybacks to at least $4 billion per operation. The announcement caught investors by surprise.
Bitcoin gained about 7% that day, while the 30-year yield pulled back from its highest level in 19 years.
Tuesday brought no such surprise. Newsquawk calls these liquidity support operations routine, since their purpose is helping dealers offload older, thinly traded bonds. They are sized to avoid shifting yields, it added.
Dealers offered $10.7 billion, and Treasury accepted exactly $6 billion across six bonds. It was the fourth full-size fill, FXStreet reported.
Treasury paid between 52 and 71 cents on the dollar, for a cash outlay of about $3.8 billion.
Do Treasury Buybacks Still Move Bitcoin?
The price response to later buyback operations has faded. Bitcoin has since slipped below $80,000 again, CoinGecko data showed on Thursday, down 1.5% over 24 hours. While the timing seems linked it would be difficult to directly correlate the buyback and the price dip.
Yields have resisted since. The 10-year touched 5.342%, its highest since April 2002, as Treasury filled its cap on October 1, Yahoo reported.
The Federal Reserve’s two-day meeting also overlapped with Tuesday’s operation. The central bank held rates steady on Wednesday, NPR reported.
The expanded schedule runs through November 4, Chase noted. Filled caps have not clearly pulled long-term yields lower. The program may read as routine plumbing rather than a signal for risk assets. A larger size could change that.
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