Bitcoin ($BTC) saw its highest levels since the start of June after Wednesday’s Wall Street open as markets reacted to a US government liquidity move.
Key points:
- Bitcoin spikes 6% on the day to hit $69,749, its highest level since June 2.
- The US Treasury plans to at least double the maximum size of debt buyback operations to $4 billion. This might fuel a broader risk-asset rally.
- A lack of stablecoin liquidity on exchanges means that $BTC price upside remains limited, says Bitfinex. Stablecoin liquidity has decreased by $14 billion since May.
Bitcoin surges as US bond yields fall on buyback plan
Data from TradingView showed $BTC/USD passing $69,700 on Bitstamp, up 6% on the day.
$BTC/USD one-day chart. Source: Cointelegraph/TradingView
US stock markets opened higher after the US Treasury Department announced that it would at least double the level of government debt buybacks, from $2 billion to a minimum of $4 billion per operation, beginning on Sept. 9.
The US 30-year bond yield, which had hit its highest level in nearly 20 years on Tuesday, fell immediately on the news and was at 5.19% at the time of writing, down 9bps.
“This increase in buyback operation sizes reflects Treasury’s desire to provide greater liquidity support in longer-dated nominal sectors where there is consistent strong sponsorship from market participants, as evidenced by the significant volume of high-quality offers Treasury routinely receives in longer-dated buyback operations,” an official press release stated.
US 30-year bond yields one-day chart. Source: Cointelegraph/TradingView
Increased debt buybacks mean that the US government will add liquidity as a buyer to the longer-term debt market. Earlier, analysts pointed to increasing corporate debt, especially in the AI sector, as one motivator of the yield surge.
“This is NOT a debt paydown, it is just a rearrangement of the maturity schedule of Treasuries,” Peter Boockvar, chief investment officer at One Point BFG Wealth Partners, said, quoted by CNBC.
The announcement comes as US national debt approaches the symbolic milestone of $40 trillion. On Tuesday, trading resource The Kobeissi Letter noted that interest payments on the debt pile had reached $1.4 trillion over the past 12 months alone, tripling since 2020.
“If rates remain stable, interest payments are set to rise to $1.7 trillion by November 2028,” it forecast in a post on X alongside data from Bank of America.
US Treasury interest payment data. Source: The Kobeissi Letter on X.com
Stablecoin liquidity keeping Bitcoin rebound in check: Bitfinex
Discussing current $BTC price strength versus the S&P 500, which hit new all-time highs last week, crypto exchange Bitfinex pointed to Bitcoin’s own liquidity problem. Stablecoin supplies on exchanges, it noted, had decreased by $14 billion since May.
Related: Bitcoin has ‘largely purged’ froth that preceded 50% drop from $126K: BlackRock
“Until stablecoin supply turns, the rally stays unfunded,” it told X followers.
Stablecoin liquidity acts as “dry powder” waiting on the sidelines to be deployed into cryptoassets, and its absence reflects a belief among investors that major opportunities are not yet imminent.
Data from onchain analytics platform CryptoQuant’s Stablecoin Supply Ratio (SSR) indicator, which measures Bitcoin’s market cap relative to the aggregate stablecoin market cap, reflects tightening liquidity conditions over the past six weeks in particular.
A higher SSR means that stablecoin liquidity is leaving exchanges, and since June 30, it has risen from 9.82 to 11.69. The highest SSR reading of 2026 was observed on Jan. 14 at 12.83.
Bitcoin SSR data. Source: CryptoQuant
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