Bitcoin has experienced contrasting reactions to two recent US market interventions in under three weeks. While support for the Japanese yen pushed the cryptocurrency down, an operation targeting long-term yields lifted its price by 8.8%.
The first intervention occurred at the start of August, involving yen-buying operations by Japan and the New York Fed. Bitcoin slipped toward $63,000, falling 1.25%, while US stocks rose. Analysts attributed the drop to the unwinding of the carry trade, where traders borrow cheaply in yen to fund higher-risk assets like crypto. During this period, long-term US Treasury yields remained high, with the 10-year yield finishing near 4.74% and the 30-year yield holding near post-2007 highs.
The second intervention arrived on August 19, targeting the bond market directly after the 30-year yield touched 5.337%, its highest level since 2007. The Treasury increased its long-end buybacks, raising the maximum size of each operation to at least $4 billion. Bitcoin responded within the hour, trading near $69,803 and marking an 8.8% gain over 24 hours, alongside approximately $1.23 billion in crypto short position liquidations.
BTSE Chief Operating Officer Jeff Mei noted the differing market dynamics, explaining that falling yields and a softening dollar tend to encourage risk asset rallies by making borrowing cheaper and sending money further out the risk curve.
Treasury Secretary Scott Bessent announced on Thursday that buybacks could exceed $4 billion per issue and become routine policy rather than one-off surprises, while also indicating a bigger push to cut the deficit. Bessent stated that 30-year liquidity is particularly poor and that yields do not reflect underlying fundamentals, though he denied that rates drove the decision.
Despite the policy expansion, market data showed both interventions fading. The USD/JPY exchange rate returned close to its starting levels, and bond yields climbed back toward pre-announcement figures. Potential threats to the current market environment include a clean break above 5.34% on the 30-year yield or a hawkish Federal Reserve following recent meeting minutes indicating support for a rate hike from three officials.
