Bitcoin Declines Amid U.S. Debt and Deficit Concerns; Market Watches for Treasury Intervention

Huo Xing Finance reports that, on September 2, according to Forbes, Bitcoin has retreated nearly 10% since surging above $81,000 last month, falling to approximately $76,000. Amid growing concerns over U.S. debt, fiscal deficits, and global financial market turbulence, cryptocurrency market volatility has intensified, prompting investors to closely monitor whether U.S. Treasury Secretary Bessent will intervene again in the bond market. Ed Yardeni, President of Yardeni Research, stated that market fears of the “bond vigilantes” are driving yields higher as a response to dissatisfaction with massive government deficits, rising debt levels, and rapidly increasing interest costs. He expects that if the U.S. 10-year Treasury yield reaches 5%, strong demand will emerge in the bond market—potentially including intervention by Bessent. If necessary, Bessent could raise funds by issuing more short-term Treasuries and use the proceeds to repurchase long-term Treasuries, thereby preventing a panic sell-off in the bond market. Last month, Bessent unexpectedly pledged support for the bond market to lower government borrowing costs, a move that subsequently spurred a significant rally in Bitcoin prices. However, this week global bond yields have risen again, with the U.S. 10-year Treasury yield briefly climbing to 4.814%, its highest level since November 2023. Meanwhile, concerns over a potential escalation in the Israel-Iran conflict have pushed international oil prices back toward $90 per barrel, increasing financing costs for the U.S. and other major economies, and further heightening market focus on Bessent’s next potential move.