The US Treasury completed a $6 billion buyback of 20- to 30-year bonds on Tuesday, filling its full allocation cap. However, Bitcoin (BTC) did not experience the rally seen in August, instead falling below the $80,000 mark.
The muted price response contrasts sharply with the market's reaction to a similar announcement in August. On August 19, Treasury announced it would double its long-dated buybacks to at least $4 billion per operation. The surprise announcement triggered a 7% gain in Bitcoin that day, while the 30-year yield retreated from its highest level in 19 years.
Tuesday's operation differed fundamentally in its market impact. Treasury's buyback had been scheduled in advance, removing the element of surprise. Dealers offered $10.7 billion across the operation, with Treasury accepting exactly $6 billion across six bonds. It was the fourth full-size fill of the program. Treasury paid between 52 and 71 cents on the dollar, for a cash outlay of approximately $3.8 billion.
Industry observers characterize these operations as routine liquidity support designed to help dealers offload older, thinly traded bonds. Their sizing is intended to avoid shifting yields significantly.
The price response to subsequent buyback operations has weakened overall. Bitcoin has since declined below $80,000 again, down 1.5% over 24 hours as of Thursday. The 10-year Treasury yield touched 5.342%, its highest level since April 2002, as Treasury filled its cap on October 1.
The expanded buyback schedule runs through November 4. The Federal Reserve's two-day meeting overlapped with Tuesday's operation, with the central bank holding rates steady on Wednesday. Filled caps have not clearly pulled long-term yields lower, suggesting the program may function as routine financial plumbing rather than a catalyst for risk assets.
