Bitcoin Jumps to 11-Week High After US Treasury Boosts Debt Buybacks

Bitcoin just hit its highest price in nearly three months, climbing to levels not seen since early June. The reason? A big move by the US government that got investors excited.

Here's what happened. The US Treasury (the government department that manages the country's money and debt) announced it would at least double the size of its debt buybacks — from $2 billion to a minimum of $4 billion per operation, starting September 9.

A debt buyback simply means the government buys back some of its own bonds. Bonds are basically IOUs — when you buy a government bond, you're lending money to the government, and it pays you interest. When the government buys these back, it adds cash (called liquidity) into the market, which tends to lift prices of riskier assets like Bitcoin and stocks.

Key numbers to know:

• Bitcoin (BTC) climbed past $69,700, up 6% in a single day
• The US 30-year bond yield (the return investors earn on long-term government loans) fell to 5.19%, down 9 basis points
• US national debt is nearing a huge milestone of $40 trillion
• Interest payments on that debt hit $1.4 trillion over the past year — triple what they were in 2020

But there's a catch for Bitcoin. Crypto exchange Bitfinex pointed out that stablecoins (crypto tokens tied to the US dollar, often used as cash ready to invest) have dropped by $14 billion since May. Less stablecoin money means less fuel to push Bitcoin higher. As Bitfinex put it: "Until stablecoin supply turns, the rally stays unfunded."

The bottom line: The government's money move gave Bitcoin a quick boost, but the rally may lack lasting power until more cash flows back into crypto markets.

This is an AI-generated summary. Read the original article at: https://cointelegraph.com/markets/bitcoin-price-hits-11-week-high-as-us-treasury-doubles-debt-buyback-size?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound