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

[abhiseshakana]

First off, we gotta make a clear distinction that this isn't QE, and the buyback size here is tiny compared to the whole US Treasury market.

More importantly, even after they tripled the size of the buyback, 10Y and 30Y Treasury yields are still hitting peaks. Not to mention, Scott Bessent also made it pretty clear earlier that the goal of the buyback is to support market liquidity, not push rates lower or change the underlying pricing of Treasuries.

So I'm not really convinced this buyback is gonna have any major impact on Bitcoin, or cause any meaningful change in financial markets more broadly.

https://www.xtb.com/sca-en/market-analysis/news-and-research/treasury-triples-bond-buybacks-but-yields-keep-rising-tnote-at-its-highest-since-november-2023

Yup, buy back policy very different with QE. I see it as an act of caution because the size US of government debt, Treasury must continue to issue a large volume of new bonds, which bring a little over supply on market. The market is burdened by various types of bonds, and some of the older bonds are less attractive. These less liquid bonds that are bought back by the treasury. Activities to streamline the debt market will not affect Bitcoin.

But it will affect bitcoin if after buy back, government still have to issue new debt in very large amounts to covering the deficit and in the longterm, these will affect asset such as bitcoin and gold. Because even at this time investor still trust on US, but who knows when US debt getting bigger and bigger investor start thinking about rebalancing between scarce asset or asset in the form of obligations of other parties, because nowdays debt supply, financing cost, the tryst and confidence in the US fiscal balance are becoming important macroeconomic variable.

[Dogedegen]

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??

To begin we have to be clear that this has nothing to do with Bitcoin, and I don't understand why you would put it in connection to Bitcoin at all? The treasury conducts all kinds of activities, and almost none of them have anything to do with Bitcoin or crypto so unless they say that it is directly related then it is not related to it. I know that this kind of news spreads a lot in crypto circles, but that does not mean that there is some kind of direct relevance on Bitcoin but it does have indirect. Now for the buyback directly, you always have to look up the data to see what it means. If something comes into the news that does not mean it is significant in this way. $6B might sound a lot but the treasury debt is measured in trillions of dollars, so this buy back is very insignificant. I think this is just basic debt management not more than that.

[asriloni]

This idea doesn't sound work in long term. This likes using my credit card to pay my debt, which is creating a death spiral. If their main purpose to fight the increase of yield, they should do refinance. This is what's gonna happen when you put a wrong guy in charge, but i'm only wondering what's his true motivation do this this because it's obviously give no impact at all.

Beside that i see no relevance between this to Bitcoin. This sounds related more to US's plan to promote dollar backed stable coin world wide.

[Cryptomultiplier]

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??

To begin we have to be clear that this has nothing to do with Bitcoin, and I don't understand why you would put it in connection to Bitcoin at all? The treasury conducts all kinds of activities, and almost none of them have anything to do with Bitcoin or crypto so unless they say that it is directly related then it is not related to it. I know that this kind of news spreads a lot in crypto circles, but that does not mean that there is some kind of direct relevance on Bitcoin but it does have indirect. Now for the buyback directly, you always have to look up the data to see what it means. If something comes into the news that does not mean it is significant in this way. $6B might sound a lot but the treasury debt is measured in trillions of dollars, so this buy back is very insignificant. I think this is just basic debt management not more than that.

I don't think for an instant that this buyback has an influence on the price of Bitcoin for one,  but this buy back definitely shows and proves why Bitcoin as a fixed asset is needed and why it is here to stay as a solution and not a problem to fiat currency.
Where more fiat can't be printed as a way out of debt, a fixed asset like Bitcoin with the potential to double in price and bring returns is a go to option that has significance and offers a way out of debt.

[o48o]

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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??

So they are buying it back, even if it's not much it's an effort. Good for them.

But how do scarce assets need strengthening? And why would this of all things strengthen a "case" for scarcity or bitcoin? This has nothing to do with bitcoin in any level.

You can like bitcoin and you can like bonds for different reasons. Bonds don't need to have a fixed supply because they have intrinsic value. It wouldn't even make sense to cap total amount them to some arbitrary number.

[Hamza2424]

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.

Bro, don't get me wrong, but don't you think high bond prices will attract more buyers because of lower yields? What this will do is put more liquidity into old bonds that barely trade. They do it to improve market liquidity, not to move prices. They might even be doing it with new debt, not even printing, like swapping old paper with new paper haha.

So that's why the debasement is coming, and the buy Bitcoin story does not get fuel from this.

[STT]

While running a fiscal deficit it does not make alot of sense to attempt this mini QE scheme or anything similar.  The excuse is to tidy up an inefficient market but that's another way of saying manipulation.

   This is the treasury standing at the shore line commanding the tide to turn.  Modern day you could argue US treasury may be equipped with bull dozers and many tools, yet it risks only making a mess.
   What's likely to happen is the tide turns by itself and victory is declared, all it takes is some risk off event that has the world buying the safest assets which will include alot of this debt.
  Its an ego trip move, the treasury secretary was once employed privately to break the back of people who tried to do the same; he hasn't learned apparently.

BTC doesnt really  get altered by this as its small fry, it wont achieve anything for or against except reputationally its nonsense.  Dollar is weaker over time, this is just more of the same mis-management nothing new in that respect.

[Doll2233]

I think the interesting part is not about the six billion dollars but it is about the debt environment. Buying Bitcoin and treasury buybacks are quite different. I will never call this bulshit event, it is entirely a debt management operation.

Investors started thinking about the alternatives when the government has to manage a large amount of growing debt. They try to go to the traditional government debt method. The monetary policy of Bitcoin's fixed supply is different from Fiat currency and bonds. One buyback is not going to change the fundamentals of Bitcoin.