Breaking: Bitcoin Tops $78K As Bessent Eyes $1 Trillion Treasury Cash For Bond Buyback

Bitcoin broke above $78,000 after markets appeared to have absorbed the plans by the US Treasury to ramp up its buying of longer-dated government debt. The shift follows Treasury Secretary Scott Bessent’s assertion that he’d like to tap into the government’s huge $1 trillion cash cushion to help the bond-buyback program.

Bitcoin Breaks $78,000 Again Amid Treasury Buyback Plans

At press time, Bitcoin price was at $78,546.25, up 1.6%. The newest position continues to show a quick recovery in the chart. Bitcoin had seen a steady price action around $64,000 throughout August, but took off in the second half of the month. After that, it quickly rose to $68,000 and $72,000 and then started to move up to $78,000.

The chart also illustrates a definite increase in trading volume during the breakout. The volume also rose with the price gain, to around $33.96 billion a day. Since then, Bitcoin has remained around the $78,000 area, indicating that the threshold has emerged as a key support point in the market following the swift ascent.

The sudden jump came as the bond-buyback plans of the U.S. Treasury gained attention. The department recently increased the volume of its purchases of less-liquid older Treasury securities from $2 billion to $4 billion or more. Of course, single operations can be bigger than that, as Bessent has pointed out, per CNBC report.

One issue that has emerged is the funding of the purchases. The program was anticipated mainly to be funded with additional short-term bills by the Treasury, whereas participants were buying longer-term debt. It is a “Treasury Twist,” said Bessent, which is a strategy of debt management that involves reducing the maturity mix of government bonds by buying up bonds with longer maturities.

Treasury May Use Its Nearly $1 Trillion Cash Reserves For Buyback

Treasury could also access its Treasury General Account (TGA). Its account now has approximately $950 billion, well in excess of the approximately $550 billion-$600 billion goal set by the previous administration.

While the TGA is available to them for the buybacks, no figures have been given to suggest how much might be deployed or when such a move may occur. They also emphasized that the official auction schedule will not be changed.

The first buyback in the new program will take place Sept. 9. The objective is to maintain a focus on economic fundamentals and not short-term, proflavatory reporting of events, Bessent said, adding that the effort is to keep the “market in equilibrium.”