Bitcoin hit $80,000 on Monday before fading to trade near $78,835 at press time, as a slide in long-term Treasury yields dovetailed with a new U.S. Treasury plan to ramp up bond buybacks. The move comes as Washington weighs using funds from its roughly $950 billion Treasury General Account to finance larger purchases of long-dated debt, a strategy Treasury Secretary Scott Bessent has branded 'Treasury Twist.'
What the Treasury is doing
On August 19, the Treasury doubled its long-term bond buyback operations, from $2 billion to at least $4 billion each, with the first operation set for September 9. The daily cash statement showed $935.1 billion in the TGA as of August 20. So far, no TGA money has actually been spent on buybacks, but two senior Treasury officials told CNBC the account is being considered as a funding source for bigger operations.
The 30-year yield had hit 5.31% on August 17, its highest since 2007, before sliding to 5.19% two days after the buyback announcement. By August 21 it had crept back up to 5.27%, but Monday saw it ease to 5.21% — the same day Bitcoin pushed to $80,000. The 10-year also dropped to 4.69%.
Why the market is reacting
The logic: if the Treasury buys back long-dated bonds, it puts downward pressure on long-term yields. That makes longer-duration assets — equities, crypto, gold, real estate — more attractive by comparison. Fundstrat's Tom Lee made that exact case, saying the shift favors those assets.
But not everyone is buying it. Citadel Securities warned the buybacks amount to 'financial repression,' a term for keeping rates artificially low, and said the move could weaken the dollar and fuel inflation. Economist Peter Schiff took a harder line, arguing the plan shortens the average maturity of national debt and leaves the government more exposed to rising short-term rates — a setup that could force massive QE and runaway inflation.
The skeptics' counterpoint
Former Chicago Fed economist Benjamin Chabot says the whole debate may be missing the point. His argument: the TGA funds are mostly spoken for already, so drawing down the account to buy bonds doesn't change much. What actually matters, he says, is how the Treasury refills the TGA after making those purchases.
That's a subtle but important distinction. If the Treasury buys bonds with cash it was going to spend anyway, it's not printing money — it's just shifting when and how it borrows. The real signal for markets, in Chabot's view, is the borrowing pattern that follows.
What to watch
The first enlarged buyback lands September 9. Between now and then, watch the Treasury's cash balance and the yield on the 30-year. The plan hasn't been finalized, and the officials spoke to CNBC on condition of anonymity. That leaves a lot of room for the strategy to shift before any money actually moves.
