Move on Jackson’s hole and inflation fears. The real driver behind the recent fainting in crypto and values markets is probably the impending liquidity drainage derived from the general treasure account of the United States government. (TGA)A current account in the Federal Reserve that is prepared for significant accumulation.
Bitcoin
It has decreased by more than 8% to $ 113,500 since it reached records exceeding $ 124,000 last Thursday, according to Coendesk data. Prices for other important tokens such as ether (Eth)XRP and Sol de Solana (SUN) They have also corrected, dragging the lowest lower market. The Coendesk 80 index has fallen by 13% since last Thursday.
The bullish impulse has also weakened on Wall Street, where the Nasdaq Technological Index fell almost 1.40% to $ 23,384 on Tuesday, after having reached a record record of $ 23,969 a week ago.
Most market comments have attributed losses in Wall Street and in cryptographic markets to investors that eliminate before the Federal Reserve (Fed) President Jerome Powell’s scheduled speech at this week’s Jackson Hole event. The prevailing opinion is that persistent inflation data can prevent Powell from meeting market expectations.
However, David Duong argues that the main driver of the sale of sales is the fear of liquidity drainage of the expected TGA recharge.
“Jackson Hole and PPI are just excuses for market players to cut the risk before the TGA Treaso Liquidity drainage of the United States Treasury (~ $ 400b) In the coming weeks. This explains why Bitcoin has lost the trend along with many capital names. But we believe that the way forward is clearer in September, “said David Duong, head of institutional research in Coinbase, in X.
What is the general treasure account?
The General Treasury account is the Operational Account of the United States Government in the Federal Reserve, which is used to raise taxes, customs tariffs, income of the sale of values and public debt receipts, while facilitating government payments.
As well as our banking savings accounts, the TGA balance fluctuates daily, increasing with receipts and decreasing with payments.
The treasure generally spends the cash balance during periods of fiscal uncertainty, such as the perennial leaf debt roof saga, to ensure that the government complies with its obligations. The so -called TGA expense generally adds to liquidity in the system, greasing risk assets, as seen in early 2023 and early this year.
The opposite occurs when the treasure seeks to rebuild its balance by issuing more debt than necessary to finance its obligations. This tends to absorb system liquidity.
The TGA recharge is happening in fragile conditions
The TGA balance has increased from approximately $ 320 billion to more than $ 500 billion since the end of July, according to the Macromicro data source. The search for Alpha estimates that the treasure may need to issue a new debt with a value of $ 500- $ 600 billion in the next two to four months to restore the TGA to healthy levels.
Reconstruction is occurring in the context of fragile conditions that in previous years, according to Delphi Digital.
“Compared to 2023, The Financial System Now Faces Fewer Liquidity Buffers, Tighter Balance Sheet Capacity, and A Diminished Foreign Bid for Treasuries. The Structural Ability to Absorbor Lark Tightying Stance Or Delay A Pivot, The Resulting Between Supply and Available Demand Could Drive Up Funding Rates and Spill Over Into Broader Risk Assets, Including Crypto, “Marcus Wu, Delphi Digital Research Analyst, said in an explanatory.
WU added that the last large-scale reconstruction, which occurred in the second half of 2024, was compensated by other pro-liquidity developments, such as the $ 2 billion in the RRP installation of the Fed, healthy bank reserves and a strong foreign demand for debt.
However, these factors have eroded over time, “leaving the current liquidity environment ready for interruption,” Wu said.
To shorten a long history, the liquidity limitations propose a significant challenge for BTC bulls that seek to design a high end of the year trend.
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