Bitcoin Holds Near $78K as Treasury Runs $6B Buyback

The U.S. Treasury conducted a $6 billion buyback of older government bonds on Wednesday and markets sold into the offering. The 10-year Treasury yield rose to 4.84% and the 30-year yield reached 5.307%. Bitcoin traded near $78,000 during the session.

The $6 billion operation was three times the Treasury’s usual $2 billion repurchase and the largest such offer in years. Officials said the program is intended to remove older, harder-to-trade bonds from dealers’ inventories. Treasury official Scott Bessent had indicated the operation would expand; market participants had speculated about larger sizes before the $6 billion amount was announced.

Instead of lowering long-term rates, the buyback coincided with selling that pushed yields higher. A basis point equals 0.01 percentage point. Traders noted the 30-year yield moved past a level closely watched in fixed-income markets.

Bitcoin briefly dipped toward $78,000 as yields spiked, then recovered to trade near that level. Gold was near $4,407 an ounce during the same session. A comparable Treasury announcement three weeks earlier produced a stronger rally in risk assets.

The Treasury buyback differs from quantitative easing. The operation uses existing Treasury cash to repurchase selected notes and bills and is funded by issuing short-term Treasury bills. It does not reduce the country’s roughly $40 trillion total public debt and is aimed at improving liquidity for older issues.

Some investors criticized the size and timing of the buyback. Mark Spindel, chief investment officer at Potomac River Capital, described the effort as ‘Hank Paulson’s bazooka this is not.’ Stanley Druckenmiller, who once worked with Bessent, observed: ‘Governments defending prices against fundamentals always lose. The only variable is how much they spend before conceding.’

The Treasury’s purchasing window runs about 20 minutes and closes at 2 p.m. Eastern, limiting the period for intervention. Market participants said they will watch future announcements from Bessent and other officials for any sign of larger or more persistent operations.