Arthur Hayes, co-founder of BitMEX, has stated that Bitcoin markets could enter an \u201cup only\u201d phase once the U.S. Treasury General Account (TGA) is filled to its $850 billion target.<\/p>\n
As of Friday, the TGA\u2019s balance had surpassed $807 billion.<\/p>\n
Hayes commented:<\/p>\n
\u201cWith this liquidity drain complete, up only can resume.\u201d<\/p>\n
He argues that while the Treasury is amassing funds in its General Account, those dollars remain sequestered from private markets.<\/p>\n
Once the target is met and the Treasury slows its accumulation, Hayes believes liquidity will flow back into financial assets, potentially benefiting Bitcoin.<\/p>\n
Analysts react to liquidity thesis<\/p>\n
Not all market observers agree.<\/p>\n
Andr\u00e9 Dragosch, European head of research at Bitwise, pushed back against the view that net liquidity strongly correlates with Bitcoin prices. Dragosch stated:<\/p>\n
\u201cNet liquidity has a loose correlation to Bitcoin at best, though. Think that is a useless banana in my view.\u201d<\/p>\n
Despite skepticism, many traders are watching for signs of increased liquidity, especially as the U.S. Federal Reserve moves into a rate-cutting cycle.<\/p>\n
Federal Reserve initiates rate cuts<\/p>\n
On Wednesday, the Federal Reserve cut interest rates by 25 basis points, marking its first reduction since 2024.<\/p>\n