The Ministry of Finance doubled its repurchase of government bonds to support the market, but U.S. stocks only saw a slight increase—are the real signals hidden in Bitcoin?

Source: BIT Securities

Previously, U.S. Treasury rates remained high, with the 30-year Treasury yield reaching its highest level since 2007. This unfavorable macro environment has made it increasingly difficult for U.S. stocks, especially the previously soaring chip stocks, which have shown a significant correction.

Yesterday, the U.S. Treasury finally took action.

1. Treasury Steps In: Repurchase Limit Doubled

The U.S. Treasury announced that from September 9 to November 4, the single transaction repurchase limit for 10 to 30-year U.S. Treasury bonds will be at least doubled—from $2 billion to $4 billion.

This move translates to: the Treasury will spend more money to buy back the long-term bonds it previously issued that are nearing maturity. The repurchase focus is on two ultra-long maturities: 10 to 20 years and 20 to 30 years.

Once the news broke, the market reacted immediately: long-term Treasury yields fell rapidly, with the 30-year Treasury yield dropping nearly 10 basis points at one point, and U.S. stocks slightly rose, especially as the entire cryptocurrency market experienced a long-awaited surge.

2. Why the Market Responded: It's Working for the Fed

The significance of this repurchase lies not only in the amount but also in its identity.

The market generally interprets this operation as "the Treasury working for the Fed." The logic is as follows: the Fed is unlikely to directly print money to buy bonds, but long-term rates do need to be suppressed, so the Treasury steps in personally, injecting funds directly into the market through repurchases to push down long-term rates.

In terms of scale, the Treasury's repurchase cannot be compared to the Fed's quantitative easing. However, the signal it conveys is strong enough— the government is personally stabilizing the market. Sometimes, the stability of confidence is worth more than the funds themselves.

3. Anomalous Situation: Good News Arrives, but Stocks Are Indifferent

However, a rather rare phenomenon occurred in last night's market.

Normally, such a level of good news would cause U.S. stocks to soar. Yet the actual performance was disappointing: the three major indices only saw slight gains, and there was a significant divergence among sectors. The previously hottest storage and optical module sectors continued to correct, showing no reaction to this good news, as if they hadn’t received the memo at all.

Instead, a character nearly forgotten by the market suddenly stole the spotlight—Bitcoin surged unexpectedly, jumping from around $64,000 to breach the $70,000 mark.

4. Bitcoin's Anomaly: The Most Noteworthy Signal Last Night

Why did the Treasury stabilize the market, stocks remain indifferent, yet Bitcoin thrived?

The answer lies in Bitcoin's long-standing role: it is a barometer of U.S. dollar liquidity. Stock pricing looks at earnings and narratives, while Bitcoin is most sensitive to whether "money in the market is loose or tight." The Treasury's repurchase of Treasury bonds essentially supplements liquidity within the system—while stocks are still digesting their negative news, Bitcoin has already traded in the warmth of liquidity.

This also explains the previous market structure. Over the past year, U.S. dollar liquidity has been tight, with nearly all existing funds in the market absorbed by AI narratives, creating a situation where "AI rises alone, while others remain stagnant." Now the narrative has shifted: AI-related sectors are correcting, while Bitcoin suddenly takes off due to liquidity benefits.

This is actually a good thing for the entire market. The warming of liquidity will not remain confined to one asset—when water levels rise, the entire U.S. stock market ultimately benefits.

5. In Conclusion

The Treasury's repurchase operation suppresses rates and stabilizes confidence; however, the true signal of a liquidity shift is represented by Bitcoin's abrupt large bullish candle.

The adjustment in the AI sector may not be over, but the underlying logic of the market is shifting from "seizing existing supply" to "waiting for new supply." Once the faucet of funds is turned back on, the stage for the market may be much broader than it has been for the past month.

Disclaimer: This article is written by an external author and represents the author's personal views, not the stance, views, or investment advice of BIT. The information, data, and opinions mentioned are for reference only and do not constitute any form of investment, trading, financial, or other professional advice. The digital asset and securities markets carry high risks, and market views and historical performance do not guarantee future results. Investors should independently assess their own situations and bear relevant risks.