TGA liquidity will likely ease private-market constraints once the U.S. Treasury’s General Account reaches $850 billion, freeing sequestered cash to potentially boost asset prices — a key liquidity signal for crypto markets and investors tracking Federal Reserve rate actions.
Treasury General Account reaching $850B can release liquidity to private markets
Fed rate cuts and market expectations amplify how that liquidity may flow into crypto
91.9% of traders priced additional rate easing; historical correlation to Bitcoin is mixed
TGA liquidity: US Treasury General Account hitting $850B could free cash into markets; track Fed cuts and Bitcoin reaction. Read expert analysis and FAQs.
What is TGA liquidity and why does it matter to crypto markets?
TGA liquidity refers to cash held in the Treasury General Account at the Federal Reserve. When the TGA is large and being filled, funds are effectively sequestered; when it falls or stops growing toward a target such as $850 billion, that cash can re-enter private markets and influence asset prices, including crypto, through increased market liquidity.
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Liquidity movements from the Treasury can shift cash availability for banks, funds, and brokers, which in turn affects risk asset demand. Market participants monitor this alongside Federal Reserve policy to anticipate price pressure in cryptocurrencies.
How could the Treasury reaching $850 billion affect Bitcoin and crypto markets?
When the Treasury completes a large TGA build, the reduced fiscal draw on private balances eases the liquidity drain. Analysts like Arthur Hayes argue this change could move crypto into an “up only” phase as liquidity returns. Opposing views, including research commentary from institutional analysts, indicate the correlation between net liquidity and Bitcoin is inconsistent — the relationship exists but is not deterministic.
Short-term price action may diverge: for example, a Fed rate cut can trigger a sell-the-news reaction even as longer-term liquidity supports higher valuations. Traders should weigh timing, Fed signals, and liquidity flows together.
Source: Arthur Hayes
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Arthur Hayes, co‑founder of BitMEX, wrote that once the TGA build completes at the target, “up only can resume.” At the time this article was drafted the TGA had crossed $807 billion on its way toward the $850 billion threshold that market commentators cite as meaningful for liquidity normalization.
Not all market professionals agree. André Dragosch, European head of research at Bitwise, described net liquidity as having a loose correlation to Bitcoin, calling the linkage of primary predictive value “weak.” These differing views underscore that TGA signals should be one input among many.
The Federal Reserve cut rates by 25 basis points in 2025 — the first cut since 2024. Rate cuts expand liquidity conditions by lowering borrowing costs and can lift risk assets. However, immediate reactions can be counterintuitive: Bitcoin dipped below $115,000 after the cut in a classic sell-the-news move.
Market pricing shows strong expectations for further easing: 91.9% of traders were pricing up to a 50 BPS cut at the next FOMC meeting in October, based on futures-derived indicators from the CME Group (data referenced as plain text).