Bitcoin, Ethereum and XRP surged more than six per cent on Wednesday after the US Treasury said it would sharply expand its long-term bond buyback programme, a move that rattled bond markets, weakened the dollar and sent gold to a fresh multi-month high.
Bitcoin climbed above $68,500, Ethereum jumped nearly nine per cent, Solana rose seven per cent, and XRP added roughly four per cent, according to trading data cited by Benzinga. The rally followed a Treasury announcement that liquidity support buybacks of longer-dated nominal coupon securities would rise from a maximum of $2 billion per operation to at least $4 billion, effective from September 9 and continuing through November 4.
Bitcoin News: What Did The Treasury Announce?
The Treasury said the expanded operations were designed to support market functioning in longer-dated debt, according to its press release. Reuters reported that the announcement pushed 30-year Treasury yields sharply lower from levels close to 19-year highs, while the dollar index dropped 0.8 per cent. Gold jumped 3.5 per cent to $4,487 an ounce, its highest level since June 4, as investors moved swiftly to price in the liquidity implications.
Bitcoin News: Why Are Economists Warning Of Inflation?
Economist and commentator Peter Schiff argued the buybacks amounted to the Treasury absorbing bonds that private investors no longer wanted, funded indirectly through the Federal Reserve. “That’s why gold is already up $125 on the news,” Schiff wrote on X. He added that financing the purchases through short-term debt issuance would raise the government’s interest bill and widen the deficit, making it harder for the Fed to keep rates elevated and increasing pressure for future rate cuts and quantitative easing.
Bitcoin News: Why Is Crypto Rallying On The News?
Analysts at TD Securities, cited by Reuters, said Treasury liquidity support, combined with a Fed likely to look past an energy-driven price shock and a strengthening stagflation narrative, was pushing real interest rates lower, a backdrop that typically benefits both gold and cryptocurrencies.
Traders have described the buyback expansion as a form of “QE Lite,” suggesting the central bank’s room to tighten further is now constrained.
Bitcoin’s advance carried it past its three-month trading range and a descending trendline, with its 20-day and 50-day moving averages now acting as support. Analysts point to $71,468, the 200-day moving average, as the next key resistance level, while $65,800 is seen as a critical support zone.
