Pantera Capital founder Dan Morehead characterized Treasury Secretary Scott Bessent's bond buyback expansion as an inadequate response to US debt challenges, speaking on Bloomberg Crypto.
On August 19, the Treasury doubled its bond buyback program to $4 billion per operation, a measure designed to ease borrowing costs by allowing the government to repurchase its own debt and influence bond yields.
Morehead argued the increase was negligible compared to the scale of Treasury borrowing. The US must sell approximately $2 trillion in bonds annually, he noted, making the buyback program vastly smaller in proportion.
"It backfired because everyone could see they are off by three orders of magnitude," Morehead said, suggesting investors immediately recognized the program's limited scope relative to actual fiscal needs.
Bitcoin rallied 26% in August, marking its strongest month since November 2025 and the first net positive August since 2021. The cryptocurrency briefly exceeded $81,000 during the month.
The rally faced headwinds when Federal Reserve Chair Kevin Warsh suggested stronger economic growth could support higher interest rates, potentially reducing the appeal of yield-free assets like bitcoin. Both gold and bitcoin retreated following his Jackson Hole remarks.
Morehead characterized cryptocurrency as a macro trade that benefits when governments expand debt levels. He referenced Pantera's forecast that bitcoin would peak at $117,542 on August 10, 2025, a call he said proved accurate.
According to Morehead, historical four-year market cycles suggest additional upside potential once current market pullbacks conclude, with a new upswing potentially beginning near year-end.
