Why Did the Bitcoin Price Suddenly Spike Toward $70K?

Bitcoin jumped by roughly 6% earlier today as a surprise expansion of US Treasury bond buybacks sent yields lower and boosted demand for risk assets.

Bitcoin’s price suddenly jumped toward $70K earlier today as investors reacted to an unexpected intervention in the US government bond market.

As CryptoPotato reported, the price tapped almost $70,000, leaving more than $1 billion in liquidated positions across the derivatives market. This is pretty much the highest BTC has traded since the middle of June.

The catalyst for that move appears to have been an announcement on behalf of the US Treasury Department, which will be doubling (at least) the maximum size of liquidity-support buybacks for longer-dated government debt, raising them from $2 billion to at least $4 billion per operation. The changes will start on September 9th and remain in place through November 4.

Why the Treasury’s Move Matters for Bitcoin

The announcement came after increased stress in the bond market. The 30-year Treasury yield touched 5.34% on Tuesday, which was its highest level since 2007. This came amid persistent inflation concerns, heavy government borrowing, and worries about the overall US fiscal outlook.