Bitcoin Price Surges 6% to 11-week High as US Treasury Boosts Liquidity
BITmarkets Team
Aug 20, 2026
Bitcoin rises as Treasury expands debt buybacks
US stock markets also opened higher after the Treasury Department announced plans to at least double the size of its government debt buyback operations. Beginning Sept. 9, purchases will increase from $2 billion to a minimum of $4 billion per operation.
The US 30-year Treasury yield, which reached its highest level in nearly two decades on Tuesday, dropped following the announcement. At the time of writing, it stood at 5.19%, down nine basis points. “This increase in buyback operation sizes reflects Treasury’s desire to provide greater liquidity support in longer-dated nominal sectors where there is consistent strong sponsorship from market participants, as evidenced by the significant volume of high-quality offers Treasury routinely receives in longer-dated buyback operations,” an official press release stated.
Larger buybacks effectively add the US government as a source of liquidity in the longer-term debt market. Analysts had previously pointed to rising corporate borrowing, particularly within the artificial intelligence sector, as one factor contributing to higher yields. “This is NOT a debt paydown, it is just a rearrangement of the maturity schedule of Treasuries,” Peter Boockvar, chief investment officer at One Point BFG Wealth Partners, said.
The move comes as US national debt approaches $40 trillion. The Kobeissi Letter reported on Tuesday that interest payments on the debt had reached $1.4 trillion over the previous 12 months, roughly three times their 2020 level. “If rates remain stable, interest payments are set to rise to $1.7 trillion by November 2028,” it forecast.
Stablecoin liquidity could limit Bitcoin rally
Despite Bitcoin’s latest gains, Bitfinex highlighted a potential obstacle to a sustained recovery. The exchange noted that stablecoin balances on exchanges have declined by $14 billion since May. “Until stablecoin supply turns, the rally stays unfunded,” it told followers on X.
Stablecoins can act as readily available capital that investors can deploy into cryptocurrencies. Falling stablecoin balances on exchanges may therefore indicate that less liquidity is immediately available to support further buying.
Bitcoin liquidity conditions remain tight
CryptoQuant’s Stablecoin Supply Ratio (SSR), which compares Bitcoin’s market capitalization with the total stablecoin market capitalization, also points to tighter liquidity conditions over the past six weeks.
A higher SSR generally indicates that Bitcoin’s market value is increasing relative to available stablecoin liquidity. Since June 30, the ratio has climbed from 9.82 to 11.69. The highest SSR recorded so far in 2026 was 12.83 on Jan. 14, suggesting that despite Bitcoin’s latest rebound, stablecoin liquidity remains an important factor to watch for the sustainability of the rally.
Sources:
https://x.com/KobeissiLetter/status/2089507603386896421
