Bitcoin tops $80,000 as Treasury weighs $950 billion cash pile for bond buybacks

Bitcoin price has crossed $80,000 as the US Treasury explored tapping its roughly $1 trillion cash pile to fund an escalating effort to stabilize long-term government debt.

Two senior Treasury officials told CNBC that the Treasury General Account, the federal government's operating account at the Federal Reserve, could help finance expanded bond buybacks. The officials did not specify how much could be used or when. Reuters put the account at about $940 billion as of last Wednesday.

The report extends a sharp shift in Treasury's response to rising borrowing costs.

On Aug. 19, the department unexpectedly said it would at least double liquidity-support buybacks for 10- to 30-year securities to $4 billion per operation from $2 billion, effective Sept. 9 through Nov. 4.

Bitcoin has gained roughly 27% in August, putting it on course for its best August since 2017 in a month that has historically produced a median loss of about 7%.

Bond market pushes Treasury toward a bigger intervention

The pressure increased after the bond market quickly erased much of the relief triggered by Treasury's Aug. 19 announcement.

The 30-year Treasury yield had climbed as high as 5.337%, its highest since 2007, before falling to about 5.18% after the buyback expansion was announced. By the end of last week, longer-dated yields had largely retraced the decline. The 30-year yield remained around 5.24% on Monday, while the 10-year traded near 4.70%.