On Thursday, Bitcoin returned to the $80,000 mark, breaking through a key resistance level at $79,000 that had held since reaching a monthly high on Tuesday. The price recovery came amid reports that on August 31st, the U.S. Treasury Department plans to auction $92 billion worth of three-month Treasury bills.
According to 24-hour chart data, on Wednesday evening, Bitcoin gradually rose from below $77,900 to just above $79,000, then reached a daily high of $80,808. Selling pressure briefly pushed the price of Bitcoin back below this threshold, where it remained until buyers began pushing it up again around 4 AM Eastern Standard Time (EST).
During the initial wave, Bitcoin briefly touched the $80,500 mark, then broke through this level and reached the daily high during the second stage of the rally. As of 12:12 PM EST, the cryptocurrency was trading above $80,400, reflecting a gain of approximately 3% over the past 24 hours. The return to the $80,000 level allowed Bitcoin's market capitalization to rise again to $1.61 trillion.
With three days left until the end of August, Bitcoin appears set to finish the month with a gain of more than 20%, a sharp reversal from the nearly flat price action seen in July.
Volatility led to the liquidation of leveraged Bitcoin positions worth $105 million over 24 hours. The majority of the losses—approximately $80 million—were from short positions. This trend spread across the entire digital asset market, where short position liquidations accounted for nearly 70% ($286 million) of the total losses of $416 million.
Impact of the Treasury Bond Auction
Although unconfirmed, a Treasury bond auction of this scale typically drains short-term market liquidity. Market analysts noted that the net economic impact will depend on the issue volumes and demand from auction participants. Weak demand at the auction could lead to higher short-term yields, exerting temporary pressure on stocks and digital assets.
Furthermore, an article in The Economist titled "America will regret Scott Bessent's bond-market misses" warns that recent policy moves by U.S. Treasury Secretary Scott Bessent risk severely undermining confidence in the American financial system. The article argues that by doubling buyback limits in an attempt to artificially suppress long-term bond yields and sharply shifting the structure of new debt issuance towards short-term Treasury bills, the U.S. Treasury is merely shortening the duration of government liabilities. This makes the U.S. extremely vulnerable to future interest rate spikes and refinancing risks.
Moreover, reorienting government debt predominantly towards short-term Treasury bills creates a risk of crowding out private sector financial instruments, while attempts to limit borrowing costs without addressing structural deficits distort market pricing mechanisms.
The report also argues that the abrupt departure from the traditional principle of "regular and predictable" debt issuance in favor of discretionary yield management jeopardizes long-term investor confidence in U.S. sovereign debt and the country's financial system as a whole.
While the U.S. Treasury Department defends its actions, prominent figures like Ray Dalio argue that these steps effectively lower the inflation-adjusted yield of traditional fixed-income instruments. As a result, capital seeking long-term stores of value may shift away from sovereign bonds towards alternative "safe havens" such as gold and Bitcoin, whose prices have shown an upward trend since the Treasury's announcement.
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