The crypto and stock markets often experience significant influence from the US Treasury Department’s issuance of treasury bills to refill its Treasury General Account (TGA) balance, which in turn drains US dollar liquidity from financial markets. Despite this, BitMEX co-founder Arthur Hayes suggests that the impact is not as critical as anticipated and that risk assets, such as Bitcoin, will soon experience a price rally.
Hayes remains bullish on a potential Bitcoin rally, stating on June 20 that the TGA refill hasn’t significantly impacted risk markets. He noted that the US dollar’s net liquidity currently sits at $77 billion and believes that the US Treasury Department’s TGA refill should not be a major cause for concern. Hayes plans to buy crypto as long as the net liquidity index remains positive. Should this index turn negative, he intends to gradually slow or cease his purchases. He predicts that the US Treasury will slow down the issuance of T-bills or debt once the TGA balance exceeds $450 billion.
Throughout the debt ceiling deal, the TGA balance never rose above $40 billion, but it now stands at $250 billion. This indicates that the US Treasury has managed to build its account balance without severely affecting financial markets or US dollar liquidity. To monitor the potential effect of the TGA refill on US dollar liquidity, Hayes has created a custom index that examines changes in Reverse Repurchase Agreements (RRP) and TGA values since June 3rd, when the debt ceiling bill was signed.
The crypto market’s rebound is becoming more apparent, with continued upward momentum following the easing of uncertainty surrounding the US SEC lawsuits against Binance and Coinbase. Bitcoin’s price recently bounced back from its anticipated $24,800 support level, rising above $27,000 due to renewed buying from whales. At the time of writing, Bitcoin trades at $26,796, marking a 2% increase in the last 24 hours.
In addition, Ethereum (ETH) has remained stable near $1,750, posting a 0.5% gain. Its 24-hour high was equal to its current price, while the low during the same period reached $1,705. The upcoming week’s key events will undoubtedly have an impact on the prices of both Bitcoin and Ethereum.
It’s essential for individuals interested in investing in cryptocurrencies to conduct thorough market research. This is due to the fact that the author’s personal opinions may not reflect current market conditions, and neither the author nor the publication assumes responsibility for any personal financial losses incurred.
Source: Coingape
