Bitcoin rose to its highest level since June 2 as prices climbed 6% to $69,749, driven by the US Treasury’s plan to expand debt buyback operations to $4 billion per transaction from September 9. However, analysts warn that reduced stablecoin liquidity on exchanges may constrain further gains.
The US Treasury Department announced the expansion of its debt buyback programme, citing efforts to enhance market liquidity. The move follows a 9-basis-point decline in the yield of US 30-year bonds, reflecting investor sentiment ahead of the larger buybacks. Peter Boockvar, chief investment officer at One Point BFG Wealth Partners, described the plan as a “rearrangement of the maturity schedule of Treasuries,” rather than a debt reduction.
Stablecoin liquidity on exchanges has fallen by $14 billion since May, according to exchange data, with Bitfinex highlighting concerns that diminished supply could limit Bitcoin’s upside. The Stablecoin Supply Ratio (SSR), a metric tracking onchain flows, rose to 11.69 from 9.82 on June 30, though it peaked at 12.83 on January 14.
Forecasts suggest US debt interest payments will reach $1.7 trillion annually by November 2028, up from $1.4 trillion over the past 12 months, as noted in analyses by Bank of America and The Kobeissi Letter. CryptoQuant’s data underscores ongoing monitoring of stablecoin dynamics, with Bitfinex stating on X that “until stablecoin supply turns, the rally stays unfunded.”
The Treasury’s plan is viewed as a potential catalyst for broader risk assets, though its long-term impact remains speculative. Analysts caution that macroeconomic pressures, including rising debt costs, could influence market trajectories beyond immediate liquidity effects.
Written by Jessica Primrose
Stablecoins Desk
