Fun

Bitcoin’s Big Breakout? Fed’s “Not QE, QE” Just Flipped The Switch

News Feed - 2025-02-18 01:02:04

Este artículo también está disponible en español.


A fresh infusion of liquidity from the US Treasury General Account (TGA) is making waves among market observers, with some analysts speculating this could be a key trigger for Bitcoin’s next major move. While the Federal Reserve continues its Quantitative Tightening (QT) program, the TGA’s latest cash injection—pegged at up to $842 billion—has sparked debate over whether we are witnessing a stealth version of quantitative easing, sometimes referred to as “Not QE, QE.” Fed’s “Not QE, QE”


In a post shared on X, macro analyst Tomas (@TomasOnMarkets) offered a breakdown of how this dynamic is playing out: “‘Not QE, QE’ has officially started. A liquidity injection that could total up to $842bn from the US Treasury General Account began this week. Functionally, this is similar to Quantitative Easing, but on a temporary basis.”


The backdrop for this liquidity surge is the binding $36 trillion US debt limit. With no new debt issuance allowed until a fresh debt ceiling agreement is reached, the Treasury is forced to rely on funds from the TGA to cover government spending obligations. This draws down the TGA balance—$842 billion as of Tuesday, February 11—effectively injecting liquidity into financial markets. Related Reading Bitcoin Network Activity Is Declining — Impact On Price? 1 day ago


According to Tomas, the Treasury’s “train” of TGA spending started in earnest on Wednesday, February 12: “From my understanding, the official ‘debt ceiling-induced’ Treasury General Account (TGA) drawdown began on Wednesday February 12… This train is now in motion and will not stop until lawmakers come to a new debt ceiling agreement.”


He projects that the first segment of this process will likely involve around $600 billion in injections between February 12 and April 11. After the April tax season, a temporary replenishment of the TGA could occur, but until a new debt ceiling deal is reached, the Treasury will presumably continue to spend down existing cash reserves.


While some observers are hailing this development as a de facto round of QE, Tomas underscores that the final net impact depends on two critical drains on liquidity: The Federal Reserve is rolling off assets at about $55 billion per month, which Tomas expects to continue at least through the next FOMC meeting in March. Over two months, that translates to an estimated $110 billion liquidity reduction.


With the Treasury issuing fewer T-bills due to debt-ceiling constraints—termed “net negative T-bill issuance”—money market funds may have fewer short-term government securities to buy. This scarcity could prompt them to park more cash in the Fed’s Reverse Repo facility, which effectively drains liquidity from the broader market.

Tomas notes: “This may incentivize money market funds to park cash in the Fed’s Reverse Repo, potentially pushing this chart up… Reverse Repo usage increasing would be a liquidity drain, as money would be moving away from markets and into the Reverse Repo facility at the Fed.”


Overall, the true scale of the TGA-based stimulus remains uncertain. Last week, net injections into the system were estimated at $50 billion, a figure that could fluctuate in the weeks ahead as QT and Reverse Repo demand evolve.


Another key piece of the puzzle is the ongoing political deadlock over the debt ceiling. Despite calls for bipartisan cooperation, divisions within the narrow Republican majority—combined with broad Democratic opposition—complicate prospects for a swift resolution. Related Reading Analyst Says Bitcoin Is ‘Primed For A Breakout’: Is BTC Heading For $150,000 Rally? 2 days ago


House Republicans recently put forward a plan tying “trillions of dollars” in tax cuts to raising the debt ceiling. However, the measure’s passage is far from assured, as deeply conservative members object to any debt limit increase on principle. Past increases have typically required cross-party support, indicating a potentially prolonged standoff.


“This comes down on the shoulders of House Speaker Mike Johnson, as he attempts to rally lawmakers behind the plan,” Tomas notes, reflecting widespread skepticism about whether sufficient votes can be secured. Will Bitcoin Benefit?


For Bitcoin traders, these liquidity ebbs and flows often correlate with broader risk appetite—Bitcoin has historically seen upward price movements during periods of loose monetary policy and liquidity injections. Although the Federal Reserve has signaled no immediate halt to QT, the TGA drawdown’s near-term flood of cash could still buoy risk assets, including Bitcoin.


Precisely how much of this “Not QE, QE” trickles into Bitcoin remains to be seen. Yet, for market participants watching daily net liquidity metrics, the interplay between TGA drawdowns, QT, and Reverse Repo usage has become a central storyline. As the standoff in Washington continues, the Bitcoin space will be monitoring every uptick and downtick in the Fed’s liquidity charts—hoping it might just flip the switch on Bitcoin’s next big breakout.


At press time, Bitcoin traded at $96,424. Bitcoin price, 1-week chart | Source:BTCUSDT on TradingView.com Featured image created with DALL.E, chart from TradingView.com

News Feed

Institutional Investors Forecast ‘Strong Year’ for Bitcoin — 65% Expect BTC to Hit $100K, Survey Shows
Institutional Investors Forecast "Strong Year" for Bitcoin — 65% Expect BTC to Hit $100K, Survey Shows A new survey shows that institutional investors expect “a strong yea
Chainlink co-founder expects more coins to have ETFs — Token2049
Ezra Reguerra3 hours agoChainlink co-founder expects more coins to have ETFs — Token2049Chainlink co-founder Sergey Nazarov believes the crypto space will “keep pushing the limits” of what’s possible.808 Total vi
US energy officials agree to 'destroy' all data from crypto mining survey
Ciaran Lyons7 hours agoUS energy officials agree to "destroy" all data from crypto mining surveyThe Texas Blockchain Council and Bitcoin mining firm Riot Platforms claimed that the survey had political motives and posed
Brian Quarmby6 hours agoFBI warns of phishing scams and social media account hijackersThe FBI warned that the account hijackers work to “create a sense of urgency” with their posts and urged people to vet any website
French watchdog fines Google 250M euros for AI IP infringement
Savannah Fortis10 hours agoFrench watchdog fines Google 250M euros for AI IP infringementBig Tech giant Google accepted a fine of 250 million euros from the French competition authorities on the grounds of a breach of EU
BTC Bull Presale an Excellent Opportunity to Buy the Dip amid Bitcoin Correction
Este artículo también está disponible en español. Bitcoin flirted around with the magic $100K number for a couple of months before selling off and falling all the way to
Taiwan establishes association to help crypto firms self regulate
Turner Wright4 hours agoTaiwan establishes association to help crypto firms self regulateThe association was formed after the country’s Justice Ministry proposed AML amendments for crypto firms that could result in pen
Dogecoin Sets The Stage For A Liftoff With Key Reversal Pattern
Reason to trust Strict editorial policy that focuses on accuracy, relevance, and impartiality Created by industry experts and meticulously reviewed The highest standards in reporting and pu
Marcel Pechman4 hours agoBitcoin derivatives traders target $40K BTC price now that Binance is resolvedBTC futures and options held firm despite a wave of negative news, and data shows traders targeting $40,000.1388 Tota
Turner Wright8 hours agoTether freezes $225M in USDT linked to romance scammers amid DOJ investigationThe stablecoin issuer reported the illicit funds had been used by a Southeast Asia-based crime syndicate responsible f
Arijit Sarkar1 hour agoUK crime agency scouts for seasoned crypto investigatorsThe ideal candidate to join the National Crime Agency will be an existing member of the police staff who is a certified, accredited financial
Japanese exchange BitFlyer to acquire FTX Japan
Helen Partz1 hour agoJapanese exchange BitFlyer to acquire FTX JapanFTX Japan, a Japanese subsidiary of the collapsed FTX exchange, is preparing to return with a new owner after repaying its customers in 2023.503 Total v