The U.S. Treasury’s plan to routinely buy back long-term government debt could mark a turning point for bitcoin $BTC$72,240.20 by easing one of the pressures that has weighed on crypto markets, according to macro strategist Mark Connors.
Treasury Secretary Scott Bessent said Thursday that the government expects to conduct regular buybacks of long-dated bonds and could increase their size beyond the $4 billion previously announced.
“We want to show that [bond] yields do not reflect underlying fundamentals,” Bessent told CNBC. “We have a big toolkit.”
The comments came as the 10-year Treasury yield traded around 4.68%, up three basis points on the day but off its session high. Bitcoin added to its gains following Bessent’s remarks, nearly reaching $73,000.
Connors, a longtime bond-market investor and chief investment officer at Risk Dimensions, described the Treasury move as an unusual and important intervention. He sees it as a sign that the government is responding to pressure from rising long-term borrowing costs.
“This is the first tell,” Connors said. He expects Treasury purchases to grow as the government faces the challenge of finding buyers for its debt.
That matters for bitcoin because high Treasury yields can pull capital toward government bonds and away from risk assets. Buybacks can support bond prices and help contain yields, potentially removing some of that pressure.
Connors said the initial purchases remain small but he expects Treasury support could eventually reach between $10 billion and $30 billion a month, far beyond the $4 billion announced by Bessent.
The move has also changed his outlook for bitcoin. Connors had expected $BTC to remain subdued until November as it followed its traditional four-year cycle. He is now less certain that investors will have to wait that long.
He believes another potential step could involve changes to the supplementary leverage ratio, or SLR, which affects how much Treasury debt banks can hold relative to their capital. Easing those constraints could give banks more room to absorb government bonds.
“When that happens, that’s when bitcoin starts to seek that first $180,000 price threshold,” Connors said. His target range for the cycle through 2030 is $180,000 to $360,000.
In the immediate term, $72,000 could carry added significance because of how crypto traders are positioned.
Charles Schwab director of crypto research Jim Ferraioli said earlier modeling showed a large concentration of leveraged bitcoin shorts around $72,000.