Bessent’s bond moves and dollar weaponization strengthen Bitcoin's case — Bitwise

• Bitwise CIO Matt Hougan states that US Treasury Secretary's recent actions have strengthened two major arguments for Bitcoin as a financial asset.
• He argues that the Treasury’s potential use of nearly $1 trillion for bond buybacks could deepen concerns about financial repression.
• Hougan adds that US sanctions highlight Bitcoin’s value as a scarce, globally transferable asset outside any government's control.

US Treasury Secretary Scott Bessent’s recent actions have strengthened two of the strongest arguments for Bitcoin (BTC), according to Bitwise CIO Matt Hougan.

Treasury's bond strategy strengthens Bitcoin’s hard-asset appeal

In a late Tuesday note to investors, Hougan highlighted Bessent’s comments on CNBC and the US government’s increasing use of the dollar-based financial system as key developments that could support BTC’s long-term appeal.

He noted that Bessent initially announced plans to increase Treasury purchases of long-dated bonds from $2 billion to $4 billion, but the intervention failed to keep long-term yields down.

The 30-year Treasury yield briefly fell from 5.29% to 5.20%, while the 10-year yield dropped from 4.70% to 4.65%, but the two later reversed their declines, Hougan added.

Rather than retreating, Bessent went on CNBC, suggesting that Treasury’s buybacks could eventually exceed $4 billion.

“When that failed to calm the bond market, reports emerged that Treasury could use the nearly $1 trillion Treasury General Account to fund larger buybacks,” Hougan stated.

The shift drew strong criticism from prominent investors, including Ray Dalio, who warned that a debt crisis was approaching, urging investors to hold Gold and Bitcoin. Investor Stanley Druckenmiller described the intervention as “price management” and “a mistake far larger than $4 billion suggests,” in an op-ed commentary in The Wall Street Journal.

Economist and businessman Mohamed El-Erian also compared the policy experiment with Japan’s unsuccessful experience with yield-curve control.

“In roughly 48 hours, the conversation went from a $2 billion liquidity operation to the possibility of using $1 trillion to backstop long bonds,” Hougan wrote.

Bitwise's CIO argued that attempts to suppress long-term interest rates can push investors toward scarce assets such as Gold and Bitcoin as governments intervene in financial markets.

Dollar weaponization highlights Bitcoin’s neutrality

Another development came as Bessent outlined a broader campaign against Iran’s financial connections.

On Monday, Bessent described the effort as an “economic onslaught” and “the financial equivalent of D-Day.” He added that the administration would seek to cut Iran off from the global economy and target companies and countries doing business with the country.

Hougan noted that the announcement made clear the geopolitical power embedded in access to the dollar-based financial system. He compared the move with the 2022 freezing of Russia’s foreign-exchange reserves following its invasion of Ukraine, arguing that such actions can increase interest in monetary assets that operate outside the control of individual governments.

While Gold also serves as a store of value, Hougan shared that its physical characteristics make it more difficult to move, divide and use for transactions.

“Bitcoin is the only scarce, globally transferable monetary asset that can be directly held — and doesn’t depend on the banking or custody system of any single political entity,” Hougan added.

According to Hougan, the combination of financial repression and the dollar's growing geopolitical use creates a favorable environment for Bitcoin.

“In one short week, Bessent used the full force of the US government to highlight two of the strongest arguments for Bitcoin,” he wrote.

He added that the developments follow improving access to Bitcoin as major wealth managers increasingly include the asset in model portfolios.

Bitcoin is trading at $78,390, down 1% in the past 24 hours at the time of writing.