Bitcoin crossed the $80,000 threshold following a surge that brought its monthly gains for August to roughly 27%. The cryptocurrency's recent momentum coincides with a shift in US Treasury strategy as officials explore tapping the Treasury General Account (TGA) to fund expanded bond buybacks aimed at stabilizing long-term government debt.
Two senior Treasury officials told CNBC that the federal operating account at the Federal Reserve could help finance expanded operations. Reuters reported the account stood at approximately $940 billion, while other estimates placed the cash pile near $950 billion. This level sits well above the $550 billion to $600 billion target maintained under the prior administration.
Treasury Intervention and Bond Market Pressures
The policy discussions follow mounting stress in the bond market. The 30-year Treasury yield had climbed as high as 5.337%—its highest level since 2007—before dropping to about 5.18% following an unexpected August 19 announcement by the Treasury to double liquidity-support buybacks for 10- to 30-year securities to $4 billion per operation starting Sept. 9. Longer-term yields subsequently retraced much of that decline, leaving the 30-year yield near 5.24% and the 10-year yield near 4.70%.
Treasury Secretary Scott Bessent indicated that purchases could expand beyond the newly announced $4 billion level. The intervention addresses strained market liquidity driven by heavy corporate issuance—including approximately $220 billion in debt issued by technology companies this year to finance artificial intelligence infrastructure—and an overall national debt level that crossed $40 trillion.
Utilizing the TGA to fund buybacks could allow the Treasury to avoid immediately matching purchases with additional short-term Treasury bill issuance, altering traditional liquidity calculations. However, analysts and officials noted that the TGA must maintain sufficient balances to cover routine government obligations such as salaries, contractors, and interest payments, meaning the full balance is not designated for a bond-buying program.
Market Reaction and Outlook
The prospect of aggressive intervention has weakened the dollar and fueled a broader rally across scarce assets, with gold climbing alongside Bitcoin. Strive CEO Matt Cole stated that Bitcoin appreciating against both the dollar and gold strengthens the broader bull case amid currency debasement and rising capital competition.
At the same time, rapid price appreciation has increased the potential for near-term volatility. Bitwise Europe research head André Dragosch reported that the firm's crypto sentiment index reached its highest level since late 2024 amid a surge in funding rates, short liquidations, and investor optimism, suggesting a pullback or period of consolidation could follow.
