Bitcoin Drops Below $80,000 as Skepticism Builds Over Treasury’s ~$950B TGA-Funded Buyback Idea

Bitcoin (BTC) briefly reclaimed the $80,000 mark on Monday before quickly retreating, with the token changing hands around $78,835 at the time of writing. The move followed renewed attention on the U.S. Treasury General Account (TGA), the government’s cash balance at the Federal Reserve that is replenished by tax receipts. Treasury Secretary Scott Bessent has allowed the balance to build, with recent figures putting it close to $950 billion. Treasury’s daily cash statement showed $935.1 billion as of August 20, the latest official reading. CNBC, citing two senior Treasury officials, reported the department is weighing the use of TGA funds to help finance larger bond buybacks. The Treasury doubled its buyback size on August 19, lifting long-end operations from $2 billion to at least $4 billion each. The first such operation is scheduled for September 9, according to the department’s announcement. Market participants focused on the liquidity implications. Deploying TGA cash does not expand the Federal Reserve’s balance sheet; it reallocates funds into bank reserves, a dynamic traders often treat as a liquidity tailwind—an environment that has supported Bitcoin during the month. Still, the bond market’s reaction last week offered a cautionary template. Treasury yield data show the 30-year yield reached 5.31% on August 17, the highest since 2007. After the buyback headlines, it slipped to 5.19% two days later, only to rebound to 5.27% by August 21, erasing the rally in two sessions. On Monday, yields dipped again, with the 30-year near 5.21% and the 10-year around 4.69%, helping push Bitcoin back to $80,000 before the pullback. Critics argue the trade may struggle to hold. Bessent has described the approach as a "Treasury Twist," echoing the 1961 "Operation Twist" effort to push long-term rates lower. Citadel Securities labeled the expanded buybacks "financial repression," warning the policy could pressure the dollar and reignite inflation while leaving underlying fiscal deficits unaddressed. Euro Pacific Asset Management chief economist Peter Schiff said the plan would shorten the average maturity of U.S. debt and increase sensitivity to rising short-term rates, calling it a setup for "massive QE and runaway inflation." Former Chicago Fed economist Benjamin Chabot questioned whether using the TGA would matter in practice, noting the funds are largely committed and that the key issue is how Treasury replenishes the account after any purchases. Fundstrat’s Tom Lee offered a more constructive view, arguing the shift favors long-duration assets—listing equities, crypto, gold and real estate. For now, Treasury has not deployed TGA funds. September 9 is positioned as the first date when the discussion could shift from headlines to measurable flows.