Bitwise Chief Investment Officer Matt Hougan on Wednesday wrote that Treasury Secretary Scott Bessent may have inadvertently harnessed the government’s full power in a way that strengthens two of the biggest arguments for Bitcoin (CRYPTO: BTC)

What Did Treasury’s Intervention Trigger?

In his weekly CIO memo, Hougan argued that Bessent’s actions in the Treasury market and the administration’s use of the dollar-based financial system against Iran created a “powerful setup” for Bitcoin.

He pointed to the Treasury’s decision to double purchases of long-dated bonds in periodic buybacks to $4 billion, which came on the heels of 30-year Treasury yields at their highest levels since 2007.

While relatively small compared with overall U.S. debt issuance, Hougan said the move mattered because of the signal it sent.

Markets interpreted the intervention as an attempt to suppress long-term borrowing costs, which Hougan characterized as a form of financial repression.

Artificially suppressed yields can squeeze returns for savers while inflation erodes purchasing power, potentially boosting demand for scarce assets such as Bitcoin and gold.

Hougan said intentionally or not the moves reinforce two of Bitcoin’s strongest investment arguments: “There is nothing Bitcoin likes more than a little financial repression.”

From $4 Billion to Potentially Much More

The initial impact on yields proved short-lived: the 30-year yield dropped from 5.29% to 5.20% and the 10-year yield from 4.70% to 4.65% after the announcement before reversing.

Bessent later said buybacks could exceed $4 billion, while reports suggested the Treasury’s nearly $1 trillion cash balance could support larger purchases.

Hougan said the developments renewed focus on the roughly $40 trillion U.S. debt and concerns about currency debasement.

He cited warnings from Ray Dalio, Stanley Druckenmiller and Mohamed El-Erian over the implications of attempting to manage long-term yields.

What Strengthens Bitcoin’s Neutral-Money Case

Hougan identified a second Bitcoin catalyst in Bessent’s announcement of an “economic onslaught” targeting Iran’s global financial connections.

Bessent warned that entities facilitating money laundering for Iran would be removed from the U.S. dollar system, highlighting the dollar-based financial network’s role as an instrument of American geopolitical power.

Hougan compared the implications with the freezing of Russia’s foreign-exchange reserves following its 2022 invasion of Ukraine.

“When countries weaponize their payment systems, they inevitably cast a spotlight on neutral alternatives,” Hougan wrote.

Bitcoin, he argued, is uniquely positioned as a scarce, globally transferable asset that can be held directly without depending on the banking or custody infrastructure of any single country.

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