Zcash leads 82% surge as Treasury buybacks lift crypto market

Cryptocurrencies added about $500 billion in August to top $2.7 trillion, with Zcash up 82% as US Treasury bond buybacks lifted risk assets.

"I don't think I can change the equilibrium price. My job is to slow things down and make sure that the market doesn't get disorderly," Scott Bessent, US Treasury Secretary, said.

The Treasury said it would at least double buybacks of longer-dated debt to $4 billion per operation, a program Bessent framed as a response to a surge in yields that pushed 30-year borrowing costs to a 19-year high. The larger operations begin September 10. Bessent also pushed back on criticism from his former mentor, Stanley Druckenmiller, who called the intervention a mistake in a Wall Street Journal op-ed, telling CNBC the US bond market has been "the best performing" among global peers this year.

The liquidity injection rippled through risk assets, with high-beta tokens such as Zcash — a privacy coin on its own blockchain — outperforming as investors rotated into smaller caps. The question now is whether the rally extends into September as the Treasury begins executing the larger buybacks and markets weigh the Federal Reserve's next move.

Treasury buybacks feed the risk-on trade

The macro trigger traces to the Treasury's surprise decision to expand its debt repurchase program. Bessent argued the move was aimed at taming volatility that tends to increase in August when trading volume is thin, drawing parallels with European Central Bank purchases under Mario Draghi and years of aggressive bond buying by the Bank of Japan. "They didn't seem to have a problem when Mario Draghi did it in Europe," he said.

The supportive stance reinforced confidence in accommodative policy, feeding a broad rally that lifted the aggregate crypto market valuation above $2.7 trillion. Bitcoin, the largest token, tracked the move higher as the liquidity backdrop improved, while altcoins such as Zcash — which trades on its own privacy-focused blockchain — delivered the sharpest gains as a high-beta play on the risk-on environment.

Can the rally hold into September?

The next test comes September 10, when the Treasury begins executing the larger buybacks. Bessent said the department had yet to run the expanded operations, and he rejected suggestions that the program distorted markets or broke with the Treasury market's tradition of predictable operations.

For crypto, the liquidity spine that drove August's gains remains intact as long as the Treasury keeps buying and Bessent keeps backing accommodative policy. But the rally's durability depends on whether the Federal Reserve's next move — and the path of US yields, with the 10-year near 4.73% — keeps risk assets supported.

This article is for informational purposes only and does not constitute investment advice.