Financial markets turned volatile in mid-August after the US Treasury Department announced a larger liquidity-support program for long-dated government debt. The move pushed bond yields lower and lifted risk assets. Gold jumped quickly, while Bitcoin also broke higher after weeks of weak trading, reflecting how both markets can react when investors reassess the outlook for rates and liquidity.

The shift came on August 19, when Treasury Secretary Scott Bessent said the government would double the maximum size of liquidity-support buybacks from $2 billion to $4 billion per operation. The decision followed a sharp rise in long-term yields.

Gold Price Reverses After August Surge

The 30-year Treasury yield had reached 5.34% on August 18, its highest level in 19 years. After the buyback announcement, the yield fell toward 5.2%. Gold moved from about $4,360 per ounce to $4,530 within hours.

The gold price continued to climb and reached $4,700 on August 25, its strongest level in more than three months. The rally later faded. Gold fell to about $4,300, leaving it more than 8.5% below its recent peak and below its starting level.

Bitcoin Price Holds Most of Its Gains

Bitcoin followed the same early trend but retained more of its advance. The cryptocurrency had spent weeks below $65,000 before rising sharply to about $81,500 last week.

BTC later slipped toward $77,000 after markets turned cautious again. Even after that decline, Bitcoin remained about 20% above the $64,000 area where the rally began. That performance set it apart from gold, which erased its August gains.

Market sentiment changed after Federal Reserve Chairman Kevin Warsh spoke at Jackson Hole last Friday. His remarks were viewed as hawkish, raising expectations that interest rates could remain higher or rise further.

Bond yields recovered after the speech, while gold and Bitcoin pulled back. The stronger rate outlook also reduced support for the debasement trade, which had benefited assets seen as stores of value during earlier dollar weakness.

Bitcoin Faces New Pressure From ETF Flows

Bitcoin now faces pressure from both macro conditions and weaker demand through spot exchange-traded funds. Recent sessions have recorded more withdrawals than inflows, showing that the strong buying seen during the initial rally has slowed.

That makes ETF activity an important gauge to watch alongside bond yields and Federal Reserve policy signals, since spot funds have been a key source of institutional access to Bitcoin this year. Gold has already returned below its pre-rally level, while Bitcoin still holds a large part of its August advance. These factors remain central to short-term crypto market direction.