If you haven't seen by now, Bitcoin made a violent move today, lurching roughly 6% to above $68K at time of writing, blowing out more than $1 billion of shorts along the way.
Most of crypto moved alongside it (most notably ETH), while gold and silver ripped as well. Meanwhile, long-term Treasury yields fell, the dollar weakened, and stocks barely moved.
All in all, it's behavior that heralds the return of the beloved debasement trade: buying hard ***** ets when investors believe policymakers will ultimately tolerate inflation or currency weakness to keep the economic machine running.
This move didn't come out of nowhere. The catalyst was an announcement from the Treasury that it will at least double how much it can buy back in each operation for certain 10- to 30-year Treasuries, from $2 billion to at least $4 billion beginning September 9.
Why are they doing this? Officially, Treasury wants to make these longer-dated bonds easier to buy and sell and reduce the risk of turbulence in that part of the market. The broader reason traders care is that long-term yields have remained high as inflation persists, government borrowing grows, and investors demand more compensation to lend the government money for decades. In fact, the 30-year yield hit its highest level since 2007 just yesterday.
#moved
Most of crypto moved alongside it (most notably ETH), while gold and silver ripped as well. Meanwhile, long-term Treasury yields fell, the dollar weakened, and stocks barely moved.
All in all, it's behavior that heralds the return of the beloved debasement trade: buying hard ***** ets when investors believe policymakers will ultimately tolerate inflation or currency weakness to keep the economic machine running.
This move didn't come out of nowhere. The catalyst was an announcement from the Treasury that it will at least double how much it can buy back in each operation for certain 10- to 30-year Treasuries, from $2 billion to at least $4 billion beginning September 9.
Why are they doing this? Officially, Treasury wants to make these longer-dated bonds easier to buy and sell and reduce the risk of turbulence in that part of the market. The broader reason traders care is that long-term yields have remained high as inflation persists, government borrowing grows, and investors demand more compensation to lend the government money for decades. In fact, the 30-year yield hit its highest level since 2007 just yesterday.
#moved
3 months ago
