Scott Bessent Tried to Calm the Bond Market. Bitcoin Had Its Best Week in Three Years.

Bitcoin surged roughly 23% last week, its best weekly gain in more than three years, while stocks fell, gold gained 5% and the dollar weakened. The remarkable part came after Treasury Secretary Scott Bessent doubled planned buybacks of longer-dated government bonds: the 30-year Treasury yield briefly dropped, then recovered almost completely, while bitcoin kept climbing.

Bessent was trying to relieve pressure in the Treasury market, where long-term yields had reached levels not seen since 2007. On Wednesday, Treasury doubled the minimum size of some long-duration buybacks from $2 billion to $4 billion per operation, immediately knocking 9 basis points off the 30-year yield. Bitcoin jumped 7% that day and gold rallied 4%.

Then the trades separated. By Friday, the 30-year yield had recovered almost all of Wednesday's decline, suggesting Treasury's intervention hadn't fundamentally changed investors' appetite for long government debt. Bitcoin had gained another 10% and gold another 2%, leaving the assets commonly associated with protection against currency debasement holding gains that Treasurys couldn't.

That is what makes bitcoin's move unusual. Since 2015, there had been six previous weeks when bitcoin rose more than 15% while stocks fell, gold rose and the dollar weakened. Every one of those episodes also featured falling 30-year Treasury yields. Last week, bitcoin gained 23% even though the 30-year yield finished one basis point higher.