US Debt Ceiling and the Crypto Market: Will TGA Liquidity Injection Trigger a Surge?
The US debt ceiling issue has garnered attention again. If an agreement is reached in August, the Treasury may release massive liquidity. History shows that such capital injections often lead to explosive growth in the crypto market.
TGA Account: The Market's “Faucet”
The Treasury's TGA account directly affects market liquidity:
2017: After TGA liquidity injection, Bitcoin rose from $1,000 to $20,000, and altcoins surged.
2023: After the debt ceiling was resolved, $500 billion was injected into the market, Bitcoin rose from $25,000 to $40,000, and DeFi and Meme coins skyrocketed.
Conclusion: TGA outflow = Increased market liquidity = Benefiting risk assets.
The Logic of the US “Debt-Driven” Economy
The US relies on debt to sustain its economy:
1. In the early days of the nation, debt issuance attracted European capital.
2. Under the dollar system, US Treasuries became the world's core asset.
3. The debt ceiling has been raised multiple times, but each time approaching default causes market turbulence.
Key Cases:
The 2011 debt crisis led to a downgrade of the US credit rating by S&P, while Bitcoin rose against the trend.
After the 2023 crisis and massive liquidity injection, a crypto bull market was directly spawned.
August 2024: A crucial turning point.
This August, the Treasury's cash will be exhausted, and two scenarios may arise:
Congress raises the ceiling, TGA liquidity injection
1. Liquidity surges, the crypto market and other sectors may lead the rally.
2. Negotiations break down, liquidity tightens.
3. The market faces short-term pressure, but Bitcoin may benefit from its safe-haven status.
How to Position?
If liquidity is injected, focus on:
1. Bitcoin
2. Ethereum
3. Low-market-cap altcoins
4. Meme coins
Risks: Debt negotiations may trigger short-term volatility, and high interest rates may offset some liquidity effects.
Conclusion
The crypto market is driven by liquidity, and TGA is the “faucet.” If liquidity is injected in August, altcoins may explode; if tightened, Bitcoin may become a safe haven. Investors should track fund flows in advance rather than blindly chase prices.
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