The U.S. Treasury this week announced it will at least double the size of its liquidity support repurchase program for 10- to 30-year government bonds, and in tandem, both bitcoin and gold have moved higher.
As of Thursday, bitcoin climbed to roughly $78,000, marking one of its highest levels this week, with weekly gains of about 20% to 23%. Gold, meanwhile, traded near $4,585 per ounce, with August gains exceeding 13% — a pace that, if sustained, would represent the strongest monthly performance since 1999. Traders interpret this pairing as a repricing of the dollar and long-term interest rate outlook rather than a standalone cryptocurrency rally.
Price action and fund flows
Bitcoin has surged since Wednesday, breaking above $75,000 during Asian trading hours and touching an intraday high near $78,000 to $79,000 before consolidating in the $76,000 to $78,000 range. Other major digital assets like Ethereum have also strengthened notably during the same period.
Spot bitcoin ETFs have recorded net inflows for several consecutive days: approximately $517 million on Tuesday and $606 million on Wednesday, marking the largest single-day intake since early May. Over the four-day stretch, net inflows totaled roughly $1.6 billion, with BlackRock's IBIT accounting for a significant share. On the derivatives front, forced short covering has amplified the upside move, with multiple data providers estimating that crypto short liquidations over the past three days have reached billions of dollars. The Fear & Greed Index has climbed to around 62, entering "greed" territory. It is worth noting that the price jump blends both macro pricing and positioning squeezes, which are difficult to fully disentangle.
Gold rose approximately 1.5% on Friday. Commodity traders note that following the Treasury's expansion of long-end repurchases, both gold and bitcoin benefit as "de-monetization trades." The dollar index has weakened, and long-end Treasury yields initially fell after the announcement before partially recovering, indicating that the immediate impact and sustainability of the intervention are still being tested by the market.
What the Treasury operation actually means
The Treasury has raised the single-operation repurchase cap from roughly $2 billion to at least $4 billion, with implementation slated to begin September 9, covering nominal securities with maturities of 10 to 30 years. Treasury Secretary Bessent subsequently stated that the size has been "at least doubled," adding that the "toolbox is large" and that amounts exceeding $4 billion are not ruled out. The trigger for this move was the 30-year yield reaching its highest level since 2007 alongside thin summer liquidity.
Market participants broadly emphasize that this arrangement represents an expansion of an existing repurchase mechanism aimed at improving long-end liquidity — it does not constitute a new round of quantitative easing or direct money printing. The U.S. Treasury market is vastly larger than any single operation of tens of billions of dollars. Nevertheless, investors view this as a signal that officials are willing to intervene when the long end comes under pressure, thereby lowering real rate expectations, weakening the dollar, and boosting the relative appeal of scarce assets.
During the same period, President Trump urged Congress to advance crypto-related legislation (the Clarity Act), providing additional sentiment support for digital assets. Analysts believe that macro liquidity signals remain the primary driver of this synchronized cross-asset rally, with regulatory expectations playing a secondary role.
Why bitcoin and gold are rising together
PrimeXBT analyst Yonatan Landin noted that gold and silver outperformed equities on the day, suggesting the market is treating the event more as a "monetary event" than a growth event. Bitcoin's trajectory closely tracks precious metals, consistent with the typical characteristics of a de-monetization trade getting underway. Comprehensive reviews also suggest that a technical decision in the bond market has driven the correlated moves across gold, silver, U.S. equities, and bitcoin within the same window.
The logic chain can be summarized as: declining long-end yields → reduced competitiveness of risk-free assets, dollar under pressure → fixed-supply assets become relatively more favored. The sustained inflows into spot ETFs indicate that, beyond short covering, institutional capital is also participating. Should inflows slow while prices remain elevated, the sustainability of the rally would warrant reassessment.
Risks and what to watch next
Key risks include the possibility that the Treasury's intervention proves insufficient to anchor long-end yields, a sharp reversal in the dollar, or a slowdown in ETF inflows that exposes the rally's reliance on leveraged positioning. Market participants will closely monitor upcoming Treasury auctions and liquidity conditions to gauge whether the repurchase expansion effectively stabilizes the long end.
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