Bitcoin Rose Above $70,000 After the US Treasury Doubled Its Bond Buybacks

The US Treasury will at least double its buyback operations for longer-dated debt from 9 September, taking the 30-year yield down more than 10bps to 5.18% and the dollar to a three-month low. BTC gained 11% to trade through $70K for the first time since June and ETH rose 19% to just under $2,300, ending the August volatility lull as 7-day BTC implied volatility jumped from 24% to over 40%.

Crypto

Derivatives

Macro

DeFi

In Today's Note

The US Treasury will at least double its buyback operations for longer-dated debt from 9 September, taking the 30-year yield down more than 10bps to 5.18% and the dollar to a three-month low. BTC gained 11% to trade through $70K for the first time since June, and ETH rose 19% to just under $2,300.
The move ended the August volatility lull. Seven-day BTC implied volatility jumped from 24% to over 40%, funding rates spiked towards 0.03% on an eight-hour basis, and put-call skew swung as far as 5% in favour of calls.

Market Snapshot: Overnight Moves

Macro & Markets

Risk assets, in particular BTC and crypto, staged a huge rebound in yesterday’s trading driven by a number of different factors.
Most importantly, the US Treasury announced plans to at least double the size of its buyback operations of longer-dated Treasuries, only a day after long-end yields rose to multi-decade highs both in the US and globally.
That was seen as a major sign of the Trump administration’s willingness to use fiscal policies in order to bring down borrowing costs for the US, where total public debt surpassed $40T for the first time. Last November, Treasury Secretary Scott Bessent said “my job is to be the nation’s top bond salesman, and Treasury yields are a strong barometer for measuring success in this endeavour.”

According to a statement on the Treasury Department’s website, it will increase “by at least double the size of liquidity support buyback operations for longer-dated nominal coupon securities (the 10-year to 20-year sector and the 20-year to 30-year sector). The current maximum size of $2 billion per operation will be at least $4 billion per operation”, effective September 9, 2026 until November 4, 2026.
That inspired a significant rally in 30-year treasury bonds which drove yields down by more than 10 basis points to 5.18%. It also pushed the US dollar to its weakest in three months.
While the mid-week statement from Treasury did not directly explain how the doubling of the buyback operation will be funded, the Treasury typically relies on issuing shorter term bills, which mature in up to a year.
This is similar to something the Federal Reserve had done back in 2012 named as “Operation Twist”. Then, the Fed sold short-term Treasury securities and purchased long-term Treasuries, through the end of 2012, stating that “By buying long-term Treasuries, the Fed can reduce their supply in the market, raising their price.”

BTC rallied through $70K for the first time since June 2026, up 11% over the past 24 hours, while ETH saw an even stronger reaction. It currently trades up 19% over the same period, just shy of $2,300.
Those moves contrasted a more modest 0.21% gain in the S&P 500 and a 0.22% decline in the tech-heavy Nasdaq-100 which was dragged down by losses in large chipmakers.
Gold and precious metals climbed higher amidst the drop in yields, while Brent crude oil held a four-day run of gains, trading around $91.

Crypto prices were also supported by comments from President Trump who pressed Congress to pass the long delayed and highly anticipated Clarity Act while hosting major cryptocurrency executives at the White House yesterday.
Speaking at the event, Trump said, “We need Congress to take the next step by passing the Clarity Act, a fair version of the Clarity Act. It’s a very, very powerful structured legislation which will keep us ahead of China, keep us ahead of everyone else.”
The US president also referred to the Act as the “very beginning of a revolution” in finance, with the “potential to create more jobs, opportunity, and wealth for all Americans.”
For now the US Senate is expected to convene on the bill when they return again in mid-September.

The moves in spot price broke the August volatility lull which we had described in previous commentary. At-the-money implied volatility shot up at the front-end, with 7-day BTC IV jumping from 24% to over 40%. Funding rates spiked towards 0.03% on an 8-hour basis, and put-call skew rose to as much as 5% in favour of call options.

Weighing on sentiment, however, were the minutes from the Federal Reserve’s July meeting.
The FOMC voted 9-3 in July to hold the federal funds rate steady, though at least two other regional presidents who weren’t on the voting committee have since signalled they would have supported a rate increase at the meeting (Kansas City’s Jeff Schmid and St. Louis chief Alberto Musalem).
According to the minutes, “Participants judged that their inflation outlooks were highly uncertain and that inflation risks were skewed to the upside” while “Many participants assessed that policy tightening would likely be necessary if inflation did not decline.”

DeFi / Web3 / Altcoins / Crypto

Sen. Ruben Gallego (D-Ariz.), a Democrat, said negotiations on the Clarity Act remain unresolved, with ethics rules concerning public officials’ crypto interests a key obstacle to securing the 60 Senate votes needed to advance the bill.
Gallego said several ethics proposals have been sent to the White House, including a bipartisan plan with Sen. Thom Tillis (R-N.C.), a Republican, that proposes prohibiting public officials and their spouses from issuing or sponsoring digital assets and allowing state attorneys general to enforce the restriction.
Other unresolved issues include rules for stablecoin yield and measures addressing illicit finance, while the Senate is scheduled to hold an initial procedural vote on the Clarity Act on Sept. 15.

President Donald Trump said CFTC Chair Michael Selig is working on a regulatory path to allow the Hyperliquid trading platform to be operated in the U.S. legally and under federal oversight.
Perpetual futures have historically been concentrated in offshore crypto markets, though the CFTC has already allowed Kalshi and Coinbase to list bitcoin perpetuals in the U.S.
Hyperliquid’s HYPE token rose 17% over 24 hours following Trump’s comments, while ETFs linked to HYPE gained roughly 20% and Nasdaq-listed Hyperliquid Strategies rose about 30%.

The Office of the Comptroller of the Currency (OCC) is updating and finalizing the detailed rules needed to put the GENIUS Act into practice, targeting November 2026 after reviewing public feedback and missing an earlier July 2026 deadline.
The GENIUS Act, signed into law in July 2025, establishes a federal framework for stablecoin issuers, including requirements for full backing by U.S. dollars or similarly liquid assets.
The OCC’s rules will provide more detail on capital, liquidity and risk-management requirements, with the agency aiming to complete them before the law takes effect in January 2027 and begin processing applications that year.

Injective Institutional Services, an affiliate of the Injective blockchain, a DeFi-focused Layer 1 blockchain incubated by Binance, has registered with the SEC as a transfer agent, allowing it to maintain official ownership records and process transfers for tokenized securities.
The registration gives Injective regulated infrastructure for determining who legally owns securities represented onchain, rather than focusing only on issuing or trading tokenized assets.

Grayscale is seeking SEC approval to convert its existing Zcash Trust, an investment vehicle that holds ZEC on behalf of investors, into an ETF listed on NYSE Arca under the ticker ZCSH.
DCG International Investments Ltd., a wholly owned subsidiary of Grayscale parent Digital Currency Group, is considering contributing roughly 200,000 ZEC, worth about $110M, to the fund in exchange for shares, although the discussions are nonbinding and the investment may not happen.
The amended ETF filing also updates investors on a June security vulnerability affecting Zcash’s Orchard shielded pool, noting that the subsequent Ironwood network upgrade retired the affected pool and introduced safeguards designed to prevent counterfeit ZEC.

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Figure 1. Block Scholes BTC Risk-Appetite Index (white, left-hand axis) and BTC spot price (orange, right-hand axis).

Figure 2. Block Scholes ETH Risk-Appetite Index (white, left-hand axis) and ETH spot price (purple, right-hand axis).

Figure 3. BTC at-the-money implied volatility across selected tenors. Source: Deribit, Block Scholes.

Figure 4. ETH at-the-money implied volatility across selected tenors. Source: Deribit, Block Scholes.

Figure 5. BTC 25-delta put-call skew ratio across selected tenors. Source: Deribit, Block Scholes.

Figure 6. ETH 25-delta put-call skew ratio across selected tenors. Source: Deribit, Block Scholes.

Block Scholes is an FCA-regulated institutional crypto derivatives analytics platform. Live data, IV surfaces, and backtesting available via blockscholes.com.