US bond policy shift

The U.S. Treasury has issued key intervention measures to relieve the sell-off pressure faced by long-dated U.S. Treasuries. It announced that it will double the limit on liquidity buybacks for 10- to 30-year Treasuries—meaning each repurchase will be at least $4 billion.

This policy shift quickly suppressed long-term yields that had surged to their highest level in more than a decade. It effectively eased downward pressure on long-dated bonds and, through the transmission mechanism in the bond market, carried this momentum into the crypto market.

The U.S. Treasury expands repurchases of government bonds

As the yield on the 30-year U.S. Treasury briefly hit a historic high of 5.34%, the Treasury officially launched the bond repurchase doubling plan. It raised the per-transaction limit for long-dated bond repurchases from $200 million to $400 million.

This move directly provides buy-side support in the secondary market for long-dated government bonds, easing some pressure on the long-end. After the policy was released, yields on 30-year and 10-year U.S. Treasuries quickly fell by more than 9 to 15 basis points.

Image source: MacroMicro

Release global U.S. dollar liquidity

When the Ministry of Finance absorbs the existing stock of long-dated debt through structural buybacks, it directly lowers the term premium demanded by the market for long-end government bonds, thereby significantly reducing the overall financial system’s risk-free discount rate.

Although this operation is nominally debt management rather than a central bank quantitative easing, by improving the liquidity of collateral for banks and market makers, it effectively delivers the policy impact of easing overall financial conditions—this is also one of the reasons the U.S. Treasury policy has driven BTC higher.

Lowered expectations for risk-free rates

The decline in long-term risk-free rates directly reshapes the opportunity cost and valuation models for various assets, driving institutional investors seeking real returns to restart cross-asset allocation rotation strategies.

Risk assets that were previously suppressed—such as growth stocks, crude oil, precious metals, and even BTC—after Treasury yields broke above the 5% level have seen a strong valuation rebound in an environment where borrowing costs and liquidity discounts are easing on both fronts.

Macro resonance drives BTC

With the macro backdrop of U.S. bond policy shifting, Treasury yields pulling back and the U.S. Dollar Index weakening, BTC surged more than 10% within a single day, creating a rare piece of good news after this pullback.

Improving liquidity expectations and falling risk-free rates have prompted institutional capital from all directions to accelerate its return to crypto assets, creating strong upward momentum driven by a deep resonance among the overall economy, derivatives markets, and on-chain fundamentals.

Rekindling the BTC “digital gold” narrative

As long-term U.S. Treasury yields fall, the opportunity cost of holding non-yielding assets such as gold and BTC is significantly reduced.

On the other hand, amid concerns that the continuous expansion of sovereign debt will cause long-term dilution of fiat purchasing power, BTC’s “digital gold” positioning—fixed total supply and a hard cap—has been brought back into focus, boosting buy-side momentum and breaking through the 70,000 mark in one push.

ETF net inflows and OI rise in sync

Along with policy tailwinds released in the bond market, the U.S. BTC spot ETFs reversed the prior wait-and-see posture of funds; daily net inflows surged sharply, led by BlackRock and Fidelity, with BTC ETFs seeing large net inflows.

At the same time, OI across CME and multiple on-exchange CEXs and DEXs rose in step with spot prices to set new phase highs, and the funding rates for perpetual contracts remained in a healthy, reasonable positive range—indicating that this rally has been built from real demand.

Long-term holders lock up their BTC

While macro buy pressure surged, on-chain data showed that exchange BTC balances continued to decline and flowed to cold wallets; long-term holders’ coins did not show large-scale profit-taking despite the short-term price jump.

This low-liquidity supply condition leaves the market with noticeably insufficient supply elasticity when confronted with sudden incremental capital, further amplifying the upward price impact brought by macro liquidity injections, enabling BTC to rally strongly.

Key points to watch going forward

Although the shift in U.S. Treasury policy injects confidence into the market and helps BTC break through key resistance smoothly, while investors remain optimistic about the bull structure, they still need to closely watch for the possibility that the market could turn at any time.

Future market developments will depend heavily on the actual strength of the Ministry of Finance’s debt-management and rollover operations, whether the inflation path resumes its rebound, and—just as importantly—whether the BTC whales begin gradually taking profits at this stage.

The Ministry of Finance’s subsequent refinancing scale

Whether long-term yields can stay at low levels hinges mainly on the actual issuance allocation mix for long-dated government bonds in the quarterly refinancing plan the U.S. Treasury will soon release.

If future debt issuance once again exceeds expectations, the market is likely to see yields rebound because it cannot absorb such a massive amount of debt. This scenario would be unfavorable for both AI tech stocks and BTC.

Retest after BTC breaks the key level

After BTC’s strong surge on a single day, the next thing to watch is whether, following a breakout from the prior major resistance zone, it performs well in a retest to confirm that this level has effectively transformed from strong resistance into solid structural support.

In addition, whether institutional spot ETFs can maintain stable net inflows on a daily basis, and whether leverage multiples in the futures market can grow steadily within a healthy range, will be the most direct indicators for judging whether BTC can sustain a long-term bullish trend and avoid a false-breakout, range-bound shakeout.

This report is for informational purposes only. The content does not constitute any form of investment advice or decision-making basis. The data, analyses, and viewpoints cited in the text are all based on the author’s research and publicly available sources and may involve uncertainties or may change at any time. Readers should make prudent investment judgments based on their own circumstances and risk tolerance. If further guidance is needed, it is recommended to seek professional advisory opinions.