🇺🇸 U.S. Treasury to Buy Back Up to $6B in Long-Term Debt

[Tungbulu]

And so I saw this news on X, that the U.S treasury is set to buy back up to $6B of about 20-30 year bonds.

I know what would be in the minds of some folks, but this isn’t the U.S Treasury buying Bitcoin, but it does raise an interesting question,

Could continued debt management and pressure in the bond market aid in strengthening the case for scarce assets like Bitcoin over the long term? Or is this simply just a normal Treasury liquidity situation/operation that has little to no relevance to Bitcoin??

[Don Pedro Dinero]

Could continued debt management and pressure in the bond market aid in strengthening the case for scarce assets like Bitcoin over the long term? Or is this simply just a normal Treasury liquidity situation/operation that has little to no relevance to Bitcoin??

The latter. What these buybacks will do is drive up the value of the bond, which means there will be more potential buyers interested in purchasing them. Furthermore, if we recall that this government promised to buy bitcoin – albeit in ‘budget-neutral ways’ – and is spending a great deal of money on this and other things, I cannot see how this could benefit the bitcoin market.

[OcTradism]

The latter. What these buybacks will do is drive up the value of the bond, which means there will be more potential buyers interested in purchasing them. Furthermore, if we recall that this government promised to buy bitcoin – albeit in ‘budget-neutral ways’ – and is spending a great deal of money on this and other things, I cannot see how this could benefit the bitcoin market.

Sum of money is the same, so if government spend money to buy bonds, they will have less money for other things like buy bitcoin but historically the USA government has never bought bitcoin.

This site https://www.worldgovernmentbonds.com/ can help us, anyone who are interesting in tracking bonds globally. It's the World Government Bonds with a lot of information like 10-y bond yield, bank rate, and more.

Even without this bond buy back from US treasury, there will still need a long time until the USA government and USA Treasury proactively buy bitcoins.

[_act_]

Could continued debt management and pressure in the bond market aid in strengthening the case for scarce assets like Bitcoin over the long term? Or is this simply just a normal Treasury liquidity situation/operation that has little to no relevance to Bitcoin??

If United States is buying back the dept, this can make the price to increase as the bond supply falls and which means the yield/interest to also fall. Because of that, people can look elsewhere for a better profit and that is where bitcoin and other valuable assets can become a good investment for them. If they invest in bitcoin, the price will increase.

[viljy]

This has nothing to do with Bitcoin. In general, all this floundering of a system drowning in debt is the agony of the existing world system, and it can only have a short‑term impact on Bitcoin. In the future, Bitcoin will definitely have its place. And here’s why: in a neo‑feudal future, there will be no inflation, no loans (no interest on loans).

In other words, it will be impossible to earn money by selling time, because the very mode of production (the way of obtaining surplus value) will change. Human labor will no longer be the source of value (the source will be the nearly free labor of robots controlled by AI).

The concepts of "commodity" and "market" will also disappear. So what will be the source of value then? - Control over something (space, land, water, the internet, etc.). Bitcoin fits perfectly into such a system, either as a means of payment or as a reserve asset. So, Bitcoin may well outlast the dollar (and other national currencies).

[Opiate32]

Could continued debt management and pressure in the bond market aid in strengthening the case for scarce assets like Bitcoin over the long term? Or is this simply just a normal Treasury liquidity situation/operation that has little to no relevance to Bitcoin??

Possibly but maybe not for the reason people first think. If the treasury keeps buying long term debt to support liquidity while replacing some of that borrowing with short term debt, it isn’t really reducing the debt problem, it’s basically changing how the debt is managed.
Then what happens when people start questioning how sustainable that kind of debt management can be over the long term. That’s where scarce asset could become more attractive.

I wouldn’t say this buyback alone is bullish for bitcoin. What matters more is whether this kind of thing eventually makes people lose confidence in the traditional places they use to store there wealth.

[Floczy]

I know what would be in the minds of some folks, but this isn’t the U.S Treasury buying Bitcoin, but it does raise an interesting question,

Could continued debt management and pressure in the bond market aid in strengthening the case for scarce assets like Bitcoin over the long term? Or is this simply just a normal Treasury liquidity situation/operation that has little to no relevance to Bitcoin??

Just buying bonds doesn't really have any effect on Bitcoin, it's only in serious cases where government might really demand more and could cause increase in interest rates.
Think of it like a way to attract investors to buy bonds, higher interest rates could make bonds look attractive as the yield will give more profits. And of course higher interest rates will most times affect Bitcoin in the negative way

[slaman29]

Could continued debt management and pressure in the bond market aid in strengthening the case for scarce assets like Bitcoin over the long term? Or is this simply just a normal Treasury liquidity situation/operation that has little to no relevance to Bitcoin??

The latter. What these buybacks will do is drive up the value of the bond, which means there will be more potential buyers interested in purchasing them. Furthermore, if we recall that this government promised to buy bitcoin – albeit in ‘budget-neutral ways’ – and is spending a great deal of money on this and other things, I cannot see how this could benefit the bitcoin market.

When in doubt, just assume that it has nothing to do with Bitcoin and will have no effect, you'll generally be right in the end

In fact, this helps US dollar more and if BTC has any effect it will be because of stronger USD. Which, by the way, I think is getting weaker in the last 10 years, everything they do to keep it up doesn't last. This one also won't, after temporary boost.

Long term effect of all this? People understand it is unsustainable. But reality? People should know by now. Strangely they don't care.

[Haunebu]

We are already experiencing a cool bull run by BTC these days and it doesn't really these sort of moves to keep surging ahead in my opinion. The US treasury is just trying to make bonds more attractive, but this most probably won't achieve that.

Why? Thanks to the rumoured multiple FED rate cuts in the upcoming months primarily which is stressing out investors.

[pooya87]

It's like the altcoin market, they start hyping up their shitcoins (ie. the bonds) to convince the gullible buyers that what they're selling is worth investing into. That way they get some funds to flow in and keep the "shitcoin" alive a little longer.

Historically this has led to money exiting other markets and going into the bonds, but I think considering the way the US regime is losing trust, they have not been able to produce that much hype therefore they have not been able to pull as much capital from other markets as they once did. So the negative effects on bitcoin (and other markets) should be small or maybe even negligible!

Long term this is a massively negative news. The US debt is rising rapidly and the speed of that rise is increasing exponentially. That is weakening the US dollar which means price of everything goes up against it and that includes bitcoin.
We have a massive rise coming in the near future for bitcoin

[Fortify]

And so I saw this news on X, that the U.S treasury is set to buy back up to $6B of about 20-30 year bonds.

I know what would be in the minds of some folks, but this isn’t the U.S Treasury buying Bitcoin, but it does raise an interesting question,

Could continued debt management and pressure in the bond market aid in strengthening the case for scarce assets like Bitcoin over the long term? Or is this simply just a normal Treasury liquidity situation/operation that has little to no relevance to Bitcoin??

Your post is missing a crucial part. It implies that the government is paying down debt, but that's incorrect. What they're doing is in complete panic because of their constant and severe mismanagement of the economy. The debt pile has got far bigger under Trumps "leadership". Anyway, they are swapping these long dated securities which historically have been sold at higher rates in return for shorter dated 10 year treasuries. It's effectively just an illusion, like moving the deckchairs around on the titanic. Not actually improving the situation but actually showing how desperate they are right now and causing bigger problems down the line - a mess that Donald trump will never see because the old man will be dead or bathing in the billions he's already plundered

[Tungbulu]

Your post is missing a crucial part. It implies that the government is paying down debt, but that's incorrect. What they're doing is in complete panic because of their constant and severe mismanagement of the economy. The debt pile has got far bigger under Trumps "leadership". Anyway, they are swapping these long dated securities which historically have been sold at higher rates in return for shorter dated 10 year treasuries. It's effectively just an illusion, like moving the deckchairs around on the titanic. Not actually improving the situation but actually showing how desperate they are right now and causing bigger problems down the line - a mess that Donald trump will never see because the old man will be dead or bathing in the billions he's already plundered

And one intriguing part is that the buybacks are relatively small compared with the overall debt. Treasury itself says that they only have a limited effect on the debt’s maturity and that they are mainly supposed to support market liquidity. So I pretty much don’t see the buybacks as an actual solution. And I believe the bigger question should be whether these measures can actually keep working as the government borrowing continues to grow. And this is pretty much where the long term Bitcoin argument starts getting interesting.