US Treasury Injects Up to $842 Billion Amid Debt Ceiling Standoff
The US Treasury General Account (TGA) is injecting up to $842 billion into the market, raising speculation about its impact on Bitcoin. This liquidity influx occurs amid the Federal Reserve's ongoing Quantitative Tightening (QT) program.
Key Points
- The TGA's cash injection is likened to a temporary version of Quantitative Easing, termed “Not QE, QE.”
- The injection is necessary due to a $36 trillion US debt limit, forcing the Treasury to utilize existing funds for government spending.
- Tomas (@TomasOnMarkets) indicates that around $600 billion could be injected between February 12 and April 11.
- The Federal Reserve continues to reduce assets by approximately $55 billion monthly, potentially offsetting some liquidity from the TGA.
- Political deadlock around the debt ceiling complicates swift resolutions, with House Republicans proposing tax cuts tied to debt ceiling increases.
- Bitcoin traders monitor these liquidity changes, historically correlating with risk appetite and potential price movements in Bitcoin.
- As of now, Bitcoin is trading at $96,424.
