Treasury’s $14 Billion Buyback Triggered a $3.5 Billion Crypto Short Squeeze

Bitcoin jumped roughly 25% to a two-month high above $77,000 within hours of the U.S. Treasury doubling its long-dated bonds buyback operations on August 19.

Falling Treasury yields triggered a short squeeze estimated $3.5 billion across crypto derivatives.

The move raises a pointed question: did Bitcoin catch a genuine liquidity tailwind, or trade a one-day signal that the bond market itself partially reversed within 24 hours?

Treasury Secretary Scott Bessent's move came a day after the 30-year Treasury yield hit 5.34%, its highest level since 2007, amid a global bond selloff tied to inflation worries, an escalating U.S.-Israeli conflict with Iran, and mounting concern over the U.S. fiscal trajectory. Total U.S. debt outstanding crossed $40 trillion the same day the buyback announcement landed.

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What the Buyback Actually Buys

Treasury will double the size of its 10- to 30-year buyback operations to at least $4 billion per operation, up from $2 billion previously, effective September 9 through November 4.

That adds at least $14 billion of additional liquidity support this quarter, bringing maximum repurchases in the current window to $83 billion, measured against a $32.2 trillion Treasury market and $5.5 trillion in outstanding 20- and 30-year bonds.