Before you jump into FOMO, understand the real reason behind
$BTC ’s surge today and it started in the U.S. bond market.
The U.S. Treasury announced that it would double its long-term bond buybacks from $2 billion to at least $4 billion per operation starting September 9.
The result was immediate:👇
Bond yields fell sharply
The dollar weakened
₿ Bitcoin moved toward $70,000
After the rally began, a massive short squeeze followed. Short liquidations forced short sellers to buy back BTC to close their positions, accelerating the move even further.
In short:
Treasury supports the bond market ⬅️ Bond prices rise ⬅️ Yields fall ⬅️ Dollar weakens ⬅️ Financial conditions improve for risk assets ⬅️ $BTC rises
More importantly, the $4 billion per operation starts on September 9 and runs through November 4, while the Treasury plans to buy back around $83 billion during the quarter.
So compared with the roughly $32.2 trillion size of the Treasury market, the program is relatively small.
Its main impact is therefore to improve liquidity in the bond market and put downward pressure on yields not to inject massive liquidity like a QE program.
$BTC ’s surge today and it started in the U.S. bond market.
The U.S. Treasury announced that it would double its long-term bond buybacks from $2 billion to at least $4 billion per operation starting September 9.
The result was immediate:👇
Bond yields fell sharply
The dollar weakened
₿ Bitcoin moved toward $70,000
After the rally began, a massive short squeeze followed. Short liquidations forced short sellers to buy back BTC to close their positions, accelerating the move even further.
In short:
Treasury supports the bond market ⬅️ Bond prices rise ⬅️ Yields fall ⬅️ Dollar weakens ⬅️ Financial conditions improve for risk assets ⬅️ $BTC rises
More importantly, the $4 billion per operation starts on September 9 and runs through November 4, while the Treasury plans to buy back around $83 billion during the quarter.
So compared with the roughly $32.2 trillion size of the Treasury market, the program is relatively small.
Its main impact is therefore to improve liquidity in the bond market and put downward pressure on yields not to inject massive liquidity like a QE program.