• The US Treasury General Account is running low, with less than $50 billion left.
• Market expectations are for a 25-basis point rate hike in June.
• Bitcoin and altcoins remain resilient despite options expiry pressure and the second largest Bitcoin withdrawal from exchanges this year.
US Treasury General Account Dwindles
The US Treasury General Account (TGA) has dwindled to critical levels, with less than $50 billion remaining in its coffers as of May 24th. This marks the lowest number in the account since 2017 when the balance fell to around $23 billion. The TGA is the primary operating account for the United States government, servicing daily expenses.
Market Anticipates Rate Hike
Treasury yields have been on a steady rise for nine out of the last ten trading sessions according to MacroScope. House Speaker Kevin McCarthy believes an agreement on the debt ceiling will be reached and negotiations will continue “24/7” to solve this problem. Once an agreement is reached, liquidity will be drawn from the system and new bonds issued to refill the TGA account.
Cryptocurrencies Stand Tall
Despite increased pressure from options expiry and second largest Bitcoin withdrawal from exchanges this year, cryptocurrencies such as Bitcoin and altcoins remain resilient. Blake Davis, a macro analyst from Blockware Solutions argues that once an agreement on debt ceilings is reached, it could cause a severe liquidity crisis on top of the Fed’s continuing quantitative tightening efforts which might lead to cryptocurrencies experiencing a bull market return due to long-term holders‘ bias ratio hinting towards it.
If no immediate solution is found for refilling TGA’s coffers, there could be serious disruptions within financial markets worldwide due to lack of liquidity resulting in financial institutions not being able to meet their obligations or make payments promptly. This could result in stress within capital markets leading investors away from traditional investments towards riskier ones such as cryptocurrencies which may result in more money flowing into these assets increasing their prices further due to increased demand over supply over time leading them into a bull market return phase eventually depending upon market conditions at that time .
Given current circumstances with US Treasury General Account running low and treasury yields rising continuously along with market anticipation of 25-basis point rate hike come June; cryptocurrencies such as Bitcoin and Altcoins still remain strong despite pressure from options expiry withdrawals this year while long term holders‘ bias ratio hints at potential Bull Market return if an immediate solution isn’t found soon enough by authorities causing disruptions within financial markets worldwide leading more investors into investing in these risky assets over traditional ones ultimately increasing their prices further due to its limited supply eventually leading us into Bull Market Return Phase