Artthur Hayes, the former BitMEX CEO, thinks that the U.S. Treasury replenished its General Account (TGA), which caused the crypto markets to slow down because this action tapped liquidity. The TGA is similar to a federal reserve checking account that is in the Federal Reserve. The Treasury used up its reserves, issuing new debt to replenish it, draining the cash markets, and restricting the speculative flows.
Bitcoin and Risk Assets Squeezed
Risk assets experienced reductions in the course of the refill. Bitcoin fell down to approximately 113,500. The Nasdaq also fell. Hayes explains that it did not happen because the fundamentals were bad but cash was shifted to T-bills and off risk assets such as crypto.
Cuts in the rates are a signal of change in policy
Simultaneously, the Federal Reserve declared its initial rate reduction in 2025, and interest rates decreased to 4.00-4.25. Markets expect additional end year cuts. In the past, the declining rates cause the demand on assets with higher yields or fluctuating ones such as crypto and stocks.
Trillions Sitting on the Sidelines
Money market funds in the US currently contain more than 7.5 trillion. Hayes feels that after the end of the TGA refill and the rejuvenation of liquidity, then this money would come back to the risk markets. As the monetary policy becomes more accommodating and the refill near completes he says that there could be momentum of up only shortly.
