Foreign private investors sold $29.1 billion of Treasury notes and bonds in July 2026, even as a rebound in short-term bill buying pushed headline foreign demand for U.S. debt higher. Official buyers offset most of the private selling, but long-term Treasury yields stayed elevated through September — a condition that keeps Bitcoin exposed to tighter financial conditions.
Bills draw buyers, bonds don't
Foreign residents bought a net $38.8 billion of Treasury bills in July, reversing a $29 billion sale in June, according to the Treasury Department's July TIC release. Beneath that headline, private foreign investors bought $45 billion of bills while selling $29.1 billion of Treasury notes and bonds. Foreign official institutions moved the opposite way, selling $6.3 billion of bills and buying $25.5 billion of notes and bonds.
Official demand offset most of the private long-duration selling, but the combined notes-and-bonds flow still came in slightly negative. As a result, the $83.7 billion headline TIC inflow did not carry through to long-term debt. After U.S. purchases of foreign securities and other adjustments, net foreign acquisition of all long-term securities was negative $27.9 billion.
Bills mature within a year, while notes run two to 10 years and bonds 20 to 30 years. July's composition is therefore consistent with private demand favoring cash-like government paper over duration, though the data cannot show that the same investors directly rotated between maturities.
Yields stay elevated
Market pricing carried the same tension through July. The 10-year Treasury yield rose from 4.48% to 4.75% over the month, while the 30-year climbed from 4.97% to 5.27%. The three-month rate, by contrast, edged down from 3.85% to 3.83%.
By Sept. 16, 2026, the Treasury curve showed 5.01% at the 10-year mark against 3.96% at one month, a 1.05 percentage-point gap. Treasury also cautions that its monthly holdings data are primarily custody-based, which can obscure an asset owner's country, and that the July flow table is not seasonally adjusted.
Bitcoin inherits the rate risk
Higher risk-free returns can raise the opportunity cost of holding a non-yielding asset such as Bitcoin, while tighter credit can reduce the capital available for risk assets. Federal Reserve research identifies foreign demand as one factor that can affect Treasury term premiums, though the relationship is endogenous and cannot convert one month's flow into a specific yield move.
The July flows and the September curve remain separate observations, not a causal chain. The cleaner read is that foreign demand returned to the safest, shortest part of the Treasury market while long-term borrowing costs stayed elevated — and the next sign of broader improvement would be private foreign accounts returning to notes and bonds alongside a sustained decline in long yields.
Source: CryptoSlate
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