U.S. Treasury bond buybacks may boost Bitcoin, strategist predicts $180,000 target

Treasury buybacks could ease pressure on Bitcoin

The U.S. Treasury plans to regularly buy back long-term government bonds, a move that macro strategist Mark Connors says could help Bitcoin (BTC) by improving market liquidity. Bitcoin is a digital currency that operates on a decentralized network called blockchain.

Treasury Secretary Scott Bessent announced the government may increase bond buybacks beyond the previously stated $4 billion. These buybacks aim to stabilize bond yields, which have been rising and pulling investment away from riskier assets like Bitcoin.

Key details from the strategist’s outlook

• The Treasury’s bond buybacks could eventually reach $10 billion to $30 billion per month, according to Connors.
• Bitcoin is currently trading above $72,000, a level where many traders have bet against its price.
• Connors predicts Bitcoin could reach $180,000 if liquidity improves, though he warns of risks if the Clarity Act does not progress by mid-September.

Why bond buybacks matter for Bitcoin

High Treasury yields have been a challenge for Bitcoin because they attract investors to government bonds instead of riskier assets. Bond buybacks can support bond prices and help keep yields lower, reducing competition for investment capital.

Connors, chief investment officer at Risk Dimensions, called the Treasury’s move an important intervention. He believes it signals the government is addressing rising borrowing costs, which could benefit Bitcoin in the long run.

Short-term risks and trader positions

Bitcoin’s price near $72,000 is significant because many traders have placed bets that its price will fall. If Bitcoin stays above this level or rises further, these traders may be forced to buy Bitcoin to cover their positions, pushing the price up further.

However, Connors cautioned that Bitcoin could face pressure if the Clarity Act, a proposed crypto regulation, does not advance by September 15. He described this as a key near-term risk for the price.

What is confirmed

• The U.S. Treasury plans to conduct regular buybacks of long-dated bonds, with potential increases beyond $4 billion.
• Bitcoin is trading above $72,000, a level with concentrated short positions.
• Mark Connors predicts Bitcoin could reach $180,000 if liquidity improves but warns of risks tied to the Clarity Act.

What remains uncertain

• The exact size of future Treasury buybacks is unclear, with estimates ranging from $4 billion to $30 billion per month.
• The impact of the Clarity Act’s progress on Bitcoin’s price is speculative.
• Connors’ $180,000 target is a long-term prediction, not a guaranteed outcome.

Sources

• CoinDesk