Fundstrat: Shift to Short-Term U.S. Treasuries Would Be an "Explosive Catalyst" for Bitcoin

An analysis suggests that if the U.S. Treasury Department reduces long-term bond issuance and shifts its funding approach toward short-term bills, it could provide a powerful upward catalyst for Bitcoin prices. Sean Farrell, head of digital assets at investment research firm Fundstrat, made the forecast during an appearance on the Coinage podcast on the 3rd (local time), saying it "would be a pretty explosive catalyst for Bitcoin."

The event he's watching is the U.S. Treasury's Quarterly Refunding Announcement, expected around November 2. The document outlines how the U.S. government plans to raise funds going forward. Farrell sees a possibility that the Treasury will scale back or halt issuance of 10- to 30-year long-term bonds and shift more borrowing to short-term Treasury bills (T-bills).

"If that happens, it would be a pretty explosive catalyst for Bitcoin, and more broadly positive for the entire digital asset market," he emphasized. "That's something to keep an eye on."

How a Shift to T-Bills Could Push Bitcoin Higher

Farrell's logic starts with the U.S. government's debt structure. The U.S. national debt-to-GDP ratio has surpassed 120%, the fiscal deficit stands at roughly 6-7% of GDP, and it could widen further. The 10-year Treasury yield has climbed to its highest level since 2007.