U.S. Treasury debt buyback nears $14.5 billion, raising hopes of second rally in bitcoin and XRP

[Digital Today reporter Jinju Hong] The U.S. Treasury on Sept. 7 began full execution of a government debt buyback program, boosting expectations of near-term liquidity around bitcoin and XRP. The program’s weekly cap is $14.5 billion. The maximum execution size per Treasury session could reach $16.5 billion, blockchain outlet U.Today reported.

Markets are focusing on Sept. 9. The Treasury plans that day to double the per-round cap for long-term buybacks to $4 billion from $2 billion. The target is long-dated Treasuries with maturities of 10 to 30 years. The amount of bonds the Treasury is set to absorb from the market in September was presented as about $38.25 billion. Over the same period, the Federal Reserve plans to deploy up to $2.122 billion into purchases of short-term Treasuries under its principal reinvestment plan.

Crypto markets are watching whether this flow of funds, routed through major banks and dealers, spurs appetite for risk assets. Authorities describe injections of several billion dollars as a “routine” step. Traders, however, see the cash supplied as the Treasury buys back older bonds as a potential trigger for a breakout in crypto prices that have stayed in a long trading range.