Bitcoin surged to an 11-week high on Wednesday as global markets reacted to the US Treasury’s decision to at least double the size of its debt buyback operations.
Bitcoin (BTC) climbed around 6% during the day to reach $69,749, its highest level since June 2. The cryptocurrency rallied alongside US stocks after the Treasury announced plans to increase the maximum size of its debt buybacks from $2 billion to at least $4 billion per operation starting September 9.
The move triggered a decline in longer-term US bond yields, supporting broader risk assets. The US 30-year Treasury yield fell to around 5.19%, down 9 basis points, following the announcement.
The larger buybacks are expected to provide additional liquidity to the longer-term government debt market. However, analysts noted that the move does not reduce the US government’s overall debt but instead changes the maturity structure of Treasury securities.
Peter Boockvar, chief investment officer at One Point BFG Wealth Partners, described the move as a rearrangement of the maturity schedule rather than a reduction in government debt.
The announcement comes as US national debt approaches $40 trillion, while interest payments have also increased significantly in recent years.
Despite Bitcoin’s strong rebound, analysts at crypto exchange Bitfinex warned that limited stablecoin liquidity could restrict further upside. Stablecoin supplies on exchanges have reportedly declined by around $14 billion since May, reducing the amount of capital readily available to enter the crypto market.
Bitfinex said the rally could remain constrained until stablecoin supply begins to recover. Stablecoins are often considered available liquidity that can be deployed into cryptocurrencies when investors see attractive opportunities.
On-chain data also indicates tighter liquidity conditions. Bitcoin’s Stablecoin Supply Ratio (SSR), which compares Bitcoin’s market capitalization with the aggregate stablecoin market capitalization, increased from 9.82 on June 30 to 11.69.
Bitcoin’s latest surge therefore reflects improving risk sentiment following the US Treasury announcement, although weak stablecoin liquidity remains a key factor that could limit the cryptocurrency’s next move.
