Dan Morehead: Treasury's Bond Buyback Bluff Triggered Bitcoin Rally

Dan Morehead, founder of Pantera Capital, has described the US Treasury's expanded bond buyback initiative as a bluff that backfired. He directly links Bitcoin's 26% gain in August to that move.

In an interview on Bloomberg Crypto, Morehead said that investors quickly saw through Treasury Secretary Scott Bessent's action.

A Buyback Plan That Backfired

On August 19, Bessent increased the Treasury's bond buyback program twofold in an effort to reduce borrowing expenses. This mechanism allows the government to buy back its own debt, thereby affecting bond yields. The cap was raised to a minimum of $4 billion per operation.

Morehead stated that the increase was minuscule compared to the $2 trillion in bonds the Treasury needs to sell annually. Pointing out this discrepancy, he contended, only revealed the severity of the debt issue instead of resolving it.

"It backfired because everyone could see they are off by three orders of magnitude."

— Dan Morehead, Pantera Capital founder, on Bloomberg.

Bitcoin Posts Best August Since 2021

Bitcoin rose 26% in August, its best monthly performance since November 2025. This was the first time since 2021 that August showed a net gain, with the price briefly exceeding $81,000. According to BeInCrypto data, BTC was trading around $77,258 at the time of writing.

Federal Reserve Chair Kevin Warsh offered a contrasting perspective at Jackson Hole. He suggested that stronger economic growth could lead to higher interest rates, diminishing the attractiveness of assets like bitcoin that offer no yield. Following his remarks, both gold and Bitcoin declined, providing the most significant counterargument yet to Morehead's optimistic debt narrative.

Morehead described cryptocurrency as a macroeconomic trade that gains when governments continue to increase debt. He highlighted Pantera's prediction that Bitcoin would reach a peak of $117,542 on August 10, 2025, a forecast that materialized. He contended that the same four-year cycle model now indicates another upward movement after the current correction concludes.

According to Morehead, Bitcoin hitting its peak precisely on the date Pantera had predicted years earlier means the current downturn follows the same pattern. He noted that this cycle has been consistent over the 13 years his fund has been monitoring it.

Morehead anticipates a fresh rally starting around the end of this year, followed by an additional two to three-year period of growth.