Let’s talk about why BTC has surged recently?
This BTC breakout has been driven by a very important catalyst: U.S. Treasury yields.
But it’s not as simple as “Treasuries fall → BTC rises.” The real logic is:
The U.S. Treasury has started proactively repurchasing long-dated Treasuries → expectations for lower yields on the long end of the curve → a weaker U.S. dollar → marginal easing of financial conditions → repricing of non-sovereign assets like BTC and gold
Over the past few days, the market has already priced this logic directly.
On August 19, the U.S. Treasury announced that the scale of long-term Treasury buybacks would be increased from roughly $2 billion per operation to $4 billion. After the news broke, yields on the long end of Treasuries fell by around 10 bps at one point, while the dollar weakened. BTC and gold rose in sync.
So this sudden increase in long-bond buybacks from the Treasury, at its core, is a signal to the market:
The U.S. government doesn’t want long-term interest rates to keep running out of control.
And that’s why the market started trading “long-end yields topping out / improving financial conditions.”
More importantly, the dollar is also falling.
This is, in my view, the most important piece of this BTC rally.
Right now, the U.S. Dollar Index (DXY) has dropped to around 98.7, hitting a three-month low.
So what’s actually happening now is a very typical combination:
Long-end Treasury yields ↓ + DXY ↓ + BTC ↑ + Gold ↑
This matters far more than BTC rising on its own.
Because it shows the market is not trading a mere “normal crypto narrative,” but rather:
a decline in the actual attractiveness of dollar assets.
That’s why gold and BTC are both strengthening.
Short term: very bullish for BTC.
Long term: you still can’t directly interpret this as “the Fed has started easing aggressively.”
If the 10-year Treasury yield keeps falling below 4.7%, BTC could rise further
This BTC breakout has been driven by a very important catalyst: U.S. Treasury yields.
But it’s not as simple as “Treasuries fall → BTC rises.” The real logic is:
The U.S. Treasury has started proactively repurchasing long-dated Treasuries → expectations for lower yields on the long end of the curve → a weaker U.S. dollar → marginal easing of financial conditions → repricing of non-sovereign assets like BTC and gold
Over the past few days, the market has already priced this logic directly.
On August 19, the U.S. Treasury announced that the scale of long-term Treasury buybacks would be increased from roughly $2 billion per operation to $4 billion. After the news broke, yields on the long end of Treasuries fell by around 10 bps at one point, while the dollar weakened. BTC and gold rose in sync.
So this sudden increase in long-bond buybacks from the Treasury, at its core, is a signal to the market:
The U.S. government doesn’t want long-term interest rates to keep running out of control.
And that’s why the market started trading “long-end yields topping out / improving financial conditions.”
More importantly, the dollar is also falling.
This is, in my view, the most important piece of this BTC rally.
Right now, the U.S. Dollar Index (DXY) has dropped to around 98.7, hitting a three-month low.
So what’s actually happening now is a very typical combination:
Long-end Treasury yields ↓ + DXY ↓ + BTC ↑ + Gold ↑
This matters far more than BTC rising on its own.
Because it shows the market is not trading a mere “normal crypto narrative,” but rather:
a decline in the actual attractiveness of dollar assets.
That’s why gold and BTC are both strengthening.
Short term: very bullish for BTC.
Long term: you still can’t directly interpret this as “the Fed has started easing aggressively.”
If the 10-year Treasury yield keeps falling below 4.7%, BTC could rise further
