Bitcoin surged above $69,500 and Ethereum topped $2,000 on Wednesday after the US Treasury Department doubled the size of its planned buybacks of long-dated government debt.
On Aug. 19, the Treasury said it will raise the maximum size of its liquidity-support operations for 10- to 20-year and 20- to 30-year securities from $2 billion to at least $4 billion per operation. The expanded buyback program begins Sept. 9 and runs through Nov. 4.
The announcement brought immediate relief to a bond market that had been under pressure from rising borrowing costs. The 30-year Treasury yield fell to about 5.19% from Tuesday's peak of 5.34%, which had been its highest level since 2007. The 10-year yield dropped to 4.647%. The spread between 2-year and 30-year yields also narrowed sharply following the announcement.
- Maximum buyback size for 10-20 year and 20-30 year securities doubled from $2 billion to at least $4 billion per operation
- Program runs from Sept. 9 through Nov. 4
- 30-year yield fell to ~5.19% from a 2007-high of 5.34%
- 10-year yield dropped to 4.647%
- Over $400 million in short positions were liquidated as bitcoin and ethereum rallied
