The Federal Reserve has restarted quantitative easing following the end of tightening, adding tens of billions to its balance sheet in recent months.
The central bank added $43 billion in March and April before adding another $4 billion in May. This shift comes as the Treasury has issued close to $4 trillion in new debt over the past 18 months, with international buyers absorbing only about 10 percent of that total.
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Bitcoin traded around $65,000 on Thursday as escalating U.S.-Iran conflict drove oil prices higher and pushed Treasury yields to multi-month peaks. Spot Bitcoin ETFs drew nearly $1 billion in inflows over seven sessions. Grayscale Research said the price may have already bottomed.
The Federal Reserve has cut interest rates multiple times since late 2024, yet long-term borrowing costs have remained elevated as bond markets no longer follow the central bank's lead.
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Tokenized U.S. Treasuries climbed to a new high of 15.35 billion dollars in value locked on May 13. Bitcoin held above 80,000 dollars but showed limited upside as traders weighed rising odds of a Federal Reserve rate increase. The shift comes ahead of key inflation data and political meetings.
The Chilean government proposed this week to seek legislative authorization to issue US$6.2 billion in public debt in 2026 to cover expenses mandated by law.
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Rising US Treasury yields reached 5.18 percent on May 20, pressuring Bitcoin prices below $80,000. Spot Bitcoin ETFs recorded net outflows of about 14,000 BTC in the latest week.
Crescat Capital has published analysis warning of persistent inflation driven by US fiscal imbalances.
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The Federal Reserve left its benchmark interest rate unchanged at 3.50%-3.75% on Wednesday in the first policy decision under new Chair Kevin Warsh. Policymakers signaled a more hawkish stance by raising projections for rates and inflation through 2028. Bitcoin and major stock indexes slipped after the announcement.