Bitcoin and gold are rallying as investors reassess the outlook for US government debt, the dollar and inflation risks following an expansion of the US Treasury’s bond-buyback programme.
The Treasury announced that the maximum size of liquidity-support buybacks for longer-dated securities would increase from $2 billion to at least $4 billion per operation, beginning September 9.
Treasury Secretary Scott Bessent’s move is intended to improve liquidity in longer-dated Treasury markets.
However, the intervention has also revived concerns about US borrowing, debt sustainability and possible dollar weakness.
Reuters reported that the expanded buybacks had renewed concerns over potential dollar debasement.
Bitcoin was trading around the $77,000-$78,000 range, while gold was also advancing strongly.
The Treasury, however, has described the programme as “liquidity support”, not a deliberate attempt to weaken the dollar.
