Today, the US Secured Overnight Financing Rate (SOFR) increased by 18 basis points to 4.22%.
This increase was the largest daily increase in the last year and raised concerns about a liquidity squeeze in financial markets.
Experts believe this surge is driven by the US Treasury's shift toward short-term borrowing due to the increasing risk of a government shutdown. The Treasury's increased supply of short-term bonds created a glut in repo markets, pushing up funding costs. This pushed up both repo rates and the SOFR ratio.
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The liquidity squeeze triggered selling pressure on risky assets. Bitcoin, in particular, was one of the assets most affected by this development. After falling below $106,000 during the day, Bitcoin has fallen 3.27% in the last 24 hours.
On the altcoin side, Ethereum, Solana, BNB and XRP attracted attention with their prices seeing double-digit declines in the last week.
*This is not investment advice.
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