CryptoSlate
Bitcoin investors face a test of demand for US government debt when the Treasury auctions $25 billion in 30-year bonds on November 12. The November 10 sale of $42 billion in 10-year notes drew bid coverage of 2.46, down from 2.77 in October, even as its yield fell to 5.02% from 5.3%. Indirect bidders received 61.2% of competitive awards, down from 80.3%.
Why it matters
The 10-year sale was fully subscribed, but participation was also weaker than at August's comparable $42 billion new issue. That sale drew 2.53 bid coverage and approximately 76.7% indirect participation, clearing at 4.68%. October's $39 billion auction was a reopening of the August note, rather than a new issue.
Indirect bidding includes domestic and foreign customers using intermediaries, so the decline does not by itself establish foreign capital flight. The 30-year auction at 1 p.m. Eastern offers another measure of demand for long-term debt.
Market impact
If softer demand pushes long-term yields higher and tightens financing, investors could have less room in their risk budgets for Bitcoin. Firm demand and stable financing would weaken that concern. A 2023 IMF working paper linked US monetary tightening to a decline in a broad crypto price factor through investor risk-taking, but it did not study a single Treasury auction.
The bonds settle November 16 alongside other refunding securities. The $125 billion refunding replaces about $97 billion in privately held maturities and raises roughly $28 billion in new private cash. The $25 billion bond sale is gross issuance, not wholly new borrowing.
Frequently asked questions
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How did demand at the November 10-year auction compare with October?
Bid coverage fell to 2.46 from 2.77, and indirect bidders received 61.2% of competitive awards, down from 80.3%. The November sale was fully subscribed.
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Why is August a useful comparison for the 10-year sale?
Both August and November offered $42 billion in new 10-year notes. August drew 2.53 bid coverage and approximately 76.7% indirect participation, although market conditions and the securities differed.
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Does weaker indirect bidding prove foreign investors are leaving US debt?
No. Indirect bidding includes domestic and foreign customers placing orders through intermediaries, so the measure alone cannot establish foreign capital flight.
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How could Treasury yields affect Bitcoin exposure?
If weaker bond demand leads to higher long-term yields and tighter financing, investors could have less room in their risk budgets for Bitcoin. Firm demand and stable financing would weaken that concern.
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How much new private cash does the November refunding raise?
The $125 billion refunding replaces about $97 billion in privately held maturities and raises roughly $28 billion in new private cash. The $25 billion 30-year auction amount is gross issuance.
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