2023-06-20 17:10:10
© Reuters Bitcoin’s New Rally Depends on Dollar Liquidity, Says Arthur Hayes
CriptoFácil – , other cryptocurrencies and stocks are usually highly affected by the US Treasury Department, which issues bonds to replenish your Treasury account balance. But bond issuance has started to slow since the Fed started the rate hike cycle.
With less money in the market, the tendency is for dollar liquidity to decrease in financial markets. Thus, risk assets tend to suffer from this scenario, as lower liquidity makes investors more cautious when investing.
However, BitMEX co-founder Arthur Hayes has revealed that the impact is not as critical as expected and that risk assets such as Bitcoin (BTC) will start to rise soon.
Hayes optimistic about new rally
This Tuesday (20), Hayes wrote a publication on Twitter talking about the possible scenarios. According to the text, the movement has to do with the replenishment of the General Treasury Account (TGA).
This is the account that the US government uses to meet its immediate expenses. In the last debt ceiling crisis, this account reached the lowest levels seen in years. But with the suspension of the debt ceiling, the account filled up again, and TGA’s current liquidity is US$ 77 billion.
He believes that the US Treasury Department’s replenishment of TGA is not a cause for concern. Hayes claims that this should not negatively impact the price – on the contrary, the executive expects a new bullish rally.
Arthur Hayes plans to buy cryptocurrencies as the liquidity ratio remains “positive”. If the index turns “negative”, Hayes will change his strategy to sell, or stop buying. He predicts that the US Treasury will reduce Treasury bill issuance or debt issuance once the TGA balance exceeds $450 billion.
TGA’s balance during the debt ceiling deal was under $40 billion but is now $250 billion. The US Treasury is building its account balance without affecting financial markets and US dollar liquidity.
Hayes created a custom US dollar liquidity ratio to track how TGA replenishment will affect US dollar liquidity.
Bitcoin clear recovery
The cryptocurrency market rallied after uncertainty surrounding the US Securities and Exchange Commission (SEC) lawsuits against Binance and Coinbase (NASDAQ:) eased.
Bitcoin continues to rise after rebounding from the $24,800 support level. The cryptocurrency reached above $27,000 as a result of new whale purchases, but failed to hold at this level. One Bitcoin is currently worth $26,796, up 2% over the past 24 hours.
Meanwhile, Ether () price remains steady near $1,750, up 0.3%. The 24-hour low and high are at $1,705 and $1,750 respectively. This week’s main events will affect Bitcoin and ETH prices.
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