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Arthur Hayes, co-founder of BitMEX, has stated that Bitcoin markets could enter an “up only” phase once the U.S. Treasury General Account (TGA) is filled to its $850 billion target.
As of Friday, the TGA’s balance had surpassed $807 billion.
Hayes commented:
“With this liquidity drain complete, up only can resume.”
He argues that while the Treasury is amassing funds in its General Account, those dollars remain sequestered from private markets.
Once the target is met and the Treasury slows its accumulation, Hayes believes liquidity will flow back into financial assets, potentially benefiting Bitcoin.
Analysts react to liquidity thesis
Not all market observers agree.
André Dragosch, European head of research at Bitwise, pushed back against the view that net liquidity strongly correlates with Bitcoin prices. Dragosch stated:
“Net liquidity has a loose correlation to Bitcoin at best, though. Think that is a useless banana in my view.”
Despite skepticism, many traders are watching for signs of increased liquidity, especially as the U.S. Federal Reserve moves into a rate-cutting cycle.
Federal Reserve initiates rate cuts
On Wednesday, the Federal Reserve cut interest rates by 25 basis points, marking its first reduction since 2024.
Following the announcement, Bitcoin’s price briefly dipped below $115,000 in a “sell-the-news” move.
Market participants such as Coin Bureau’s Nic Puckrin noted that the cut was likely priced in ahead of the decision.
Market expectations for further cuts
According to Chicago Mercantile Exchange data, 91.9% of traders now expect an additional rate cut of up to 50 basis points at the Federal Open Market Committee’s next meeting in October.
Federal Reserve Chairman Jerome Powell signaled that committee members remain divided on the outlook for further reductions.
