Bitcoin surged to an 11-week high on Wednesday, climbing 6% to trade above $69,700 as global markets reacted to a U.S. Treasury announcement expanding its debt buyback program.
The Treasury said it would at least double the maximum size of its debt buyback operations to a minimum of $4 billion per operation, effective Sept. 9. The move is intended to enhance liquidity in longer-dated Treasury markets, where strong demand has been observed. The 30-year bond yield, which had approached near-20-year highs the prior day, fell 9 basis points to 5.19% following the announcement.
The Treasury’s decision follows recent warnings about rising U.S. debt servicing costs. Interest payments on the national debt reached $1.4 trillion over the past 12 months, nearly triple the level from 2020, according to data cited by The Kobeissi Letter. Projections suggest payments could climb to $1.7 trillion by November 2028 if current interest rates remain stable.
Bitcoin’s rally coincided with broader risk-asset strength, as U.S. equities opened higher after the Treasury’s announcement. The cryptocurrency’s price surge contrasts with tightening liquidity conditions in digital-asset markets. Stablecoin supply on exchanges has declined by $14 billion since May, limiting the funding available for further Bitcoin upside, according to Bitfinex.
The Stablecoin Supply Ratio (SSR), which measures Bitcoin’s market cap relative to the aggregate stablecoin market cap, has risen from 9.82 on June 30 to 11.69, indicating reduced liquidity on exchanges. The ratio peaked at 12.83 in mid-January, reflecting historically tight conditions.
Analysts note that the Treasury’s buyback expansion is not a debt reduction but a restructuring of maturities, aimed at improving market functioning. The announcement follows concerns over elevated corporate borrowing costs, particularly in sectors like artificial intelligence, which had contributed to recent yield pressures.
