• US Treasury General Account balance drops to perilous lows of less than $50B.
• Pressure builds as market anticipates 25-basis point rate hike in June
• Bitcoin, altcoins stand tall despite options expiry pressure.
US Treasury General Account Balance Plummets
The United States Treasury General Account (TGA) has fallen to critically low levels, with less than $50 billion remaining. This is 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 that services daily expenses, and its depletion puts pressure on the government as they negotiate a debt ceiling agreement.
Market Anticipates Rate Hike
Treasury yields have been rising over the past nine out of ten trading sessions according to MacroScope, indicating that markets expect a 25-basis point rate hike in June. House Speaker Kevin McCarthy believes an agreement on the debt ceiling will be reached, and negotiations will continue “24/7 to solve this problem” according to MacroScope. Once an agreement is reached, new bonds will be issued from liquidity drawn from the system in order to refill the TGA’s coffers.
Bitcoin and Altcoins Stand Tall
Despite increasing pressures caused by options expiry and other macroeconomic factors, Bitcoin and altcoins remain strong against a backdrop of uncertainty. Blockware Solutions‘ macro analyst Blake Davis argues that if an agreement is reached on the debt ceiling it could create a severe liquidity crisis on top of quantitative tightening measures taken by The Federal Reserve earlier this year.
Second Largest Withdraw from Exchanges This Year
Recent data compiled by CryptoQuant reveals that this week sawthe second largest withdrawal of Bitcoin from exchanges across 2021 so far – a sign that long-term investors are beginning to move their holdings off exchanges into personal wallets as they wait for prices to rise once again.
Holders’ Bias Ratio Hints at Potential Return To Bull Market
CryptoQuant’s long-term holders’ bias ratio suggests that there may be potential for Bitcoin prices return back into bull market territory soon; however until an agreement can be reached on US Treasuries and quantitative easing policies are reversed we may see more pressure being put on crypto assets in short term future.