The U.S. Treasury completed its first operation under an expanded bond-buyback program on September 10, purchasing $5.187 billion of long-dated government securities. The operation targeted off-the-run bonds—older Treasury issues that trade less actively than benchmark bonds—as part of an effort to support liquidity in that market segment.
However, immediate market movements pointed in the opposite direction. The 10-year nominal Treasury yield rose 12 basis points to 4.95%, while the 10-year real yield climbed 9 basis points to 2.55%. Higher real yields increase the return threshold for non-yielding assets like Bitcoin, which typically benefits from lower borrowing costs and easier financial conditions.
U.S. spot Bitcoin ETFs recorded net outflows of $282.7 million on the same day, marking another session of fund withdrawals. Bitcoin closed near $76,568 on September 10 before recovering to around $77,800, remaining near a closely watched support area around $76,000.
Buyback Details and Program Expansion
Treasury accepted 23 of 40 eligible bond issues maturing between February 2037 and August 2046. The department received $10.489 billion in offers against a $6 billion maximum, accepting less than the ceiling as a price-sensitive buyer. In August, Treasury announced that maximum purchase amounts for longer-dated nominal buybacks would at least double from the previous $2 billion level, beginning September 9.
Research from the Federal Reserve Bank of New York indicates that off-the-run bonds benefit from a predictable buyer, as they trade less frequently and rely more heavily on dealer intermediation. However, the study also describes the program as modest relative to overall Treasury market volumes.
Broader Market Forces at Play
The Treasury operation occurred alongside several macroeconomic developments. The Bureau of Labor Statistics reported that final-demand producer prices rose 0.4% in August and 5.4% year-over-year, with energy prices climbing 4.2%. The European Central Bank raised its three key interest rates by 25 basis points on September 10 and announced continued wind-down of its asset-purchase and pandemic-program portfolios.
U.S. consumer inflation data was scheduled for release on September 11, with market analysts treating this as a key test for whether real yields would decline or remain elevated.
Transmission Uncertainty
Treasury's purchase may improve liquidity in a specific corner of the government-bond market, but the first post-operation readings showed no evidence that improved financial conditions had extended to assets most relevant to Bitcoin. A convincing signal for easier conditions would require lower real yields, sustained spot Bitcoin ETF inflows, and Bitcoin maintaining support levels—combinations that analysts noted depend on alignment across multiple indicators rather than any single metric.
