Tomorrow sees a massive liquidity trap for Bitcoin as the US Treasury is quietly draining $77 billion from bank reserves
US bank reserves dropped sharply last week, falling $77.6 billion on a weekly-average basis to $2.985 trillion, while the Treasury General Account rose to $910.8 billion, indicating a large shift of cash into the Fed. The Treasury also raised its July-September borrowing estimate by $68 billion to an expected end-September cash balance of $950 billion; adjusting for the higher starting cash balance, the revision is effectively $87 billion. The reserve decline was not driven by Treasury cash alone: other Fed balance-sheet items also moved, and funding sources matter for how much pressure reaches bank reserves. The Aug. 5 quarterly refunding announcement will clarify the bill-versus-coupon mix, auction sizes, and buybacks, which will determine the liquidity impact. Recent reverse-repo usage remains elevated but low on a one-day basis, suggesting funding conditions are still relevant for Bitcoin’s macro backdrop.
