The US Treasury has injected $500 billion into financial markets since February by drawing liquidity from its Treasury General Account (TGA), funding government operations after a $36 trillion debt ceiling was hit on Jan. 2, 2025.
Macroeconomic financial analyst Tomas said that this liquidity surge boosted the net Federal Reserve liquidity to $6.3 trillion, and it may support Bitcoin’s
BTC
$84,920
price in the future, even though risk assets have minimal growth so far.
The TGA represents the government’s checking account at the Federal Reserve, holding capital for daily operations like paying bills or collecting taxes. A decrease in TGA capital means the balance has been deployed into the broader economy, boosting available cash in the markets.
Tomas explained that The TGA drawdown commenced on Feb. 12, following the exhaustion of "extraordinary measures" after the debt ceiling was reached. The TGA balance has dropped from $842 to roughly $342 billion, releasing liquidity into the system, and the targeted liquidity is expected to rise up to $600 billion by the end of April.
The analyst added that the current tax season will temporarily drain liquidity, but the drawdown is expected to resume in May. If debt ceiling talks extend to August, net liquidity could hit a multi-year high of $6.6 trillion, which could cause a bullish tailwind for Bitcoin.
According to a study by financial analyst Lyn Alden, Bitcoin has historically moved 83% of the time in line with global liquidity in a given 12-month period. The research termed “Bitcoin a Global Liquidity Barometer” compared Bitcoin to other major asset classes such as SPX, gold and VT, and BTC topped the correlation index with respect to global liquidity.
Past TGA drawdowns in 2022 and 2023 have fueled speculative assets like Bitcoin. Thus, a $600 billion boost, plus billions more added over Q2-Q3, could lift BTC’s value if market conditions remain stable.
