Treasury Buyback Move Sparks 25% Bitcoin Rally, Short Squeeze Hits $1.4B

What happened: The U.S. Treasury, led by Secretary Scott Bessent, doubled its long-dated bond buyback operations from $2B to $4B per operation, effective September 9 through the November refunding quarter. Bitcoin surged nearly 25%, from around $64,000 to $78,500 in days, breaking above $70,000 for the first time since June. A record short squeeze wiped out $1.1B–$1.4B in bearish positions within an hour of the announcement, as 30-year Treasury yields fell from 19-year highs.

Why it matters: The move, described by analysts as liquidity support rather than quantitative easing, injected confidence into risk assets and reversed bearish sentiment in crypto markets. Standard Chartered's Geoff Kendrick suggested this policy shift signals the cycle low is in for Bitcoin, projecting potential for $100,000 by year-end. However, some analysts warn the rally may have exhausted short sellers, raising questions about sustainability. Treasury officials emphasized the buybacks are not intended to suppress yields, but market participants interpreted the intervention as a clear tailwind for digital assets.

Source: CoinDesk