Bitcoin’s Fed Party is Over—Watch the Treasury Crash the Crypto Bash 🍾🚨

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Oh boy, here we go. The liquidity gravy train that’s been fueling Bitcoin (and every other crypto degenerate’s lottery ticket) since the start of 2025? Yeah, that’s coming to a screeching halt. You hear that sound? That’s the Federal Reserve putting the car in reverse, right into your bullish dreams. Macro guy Tomas (@TomasOnMarkets)—who probably spends more time arguing with strangers online than I spend complaining about restaurants—wants you to know the joyride is over. “Fed liquidity upswing that began on January 1 2025 is now over.” Well, thanks for the invite, Tomas. 🙄

Panic Time for Bitcoin?

What’s causing this? Congress, in all their infinite wisdom, just slapped a $5 trillion debt ceiling increase on us. Five. Trillion. You know, just a casual cosmic-sized IOU. Now the Treasury is about to go ham refilling their big piggy bank at the Fed—the Treasury General Account. They’ve been draining it to juice up the system, and now, surprise, they’re gonna suck it dry again. Did anyone even ask if we wanted that?

Here’s Tomas with the play-by-play: “Previously, draining the Treasury General Account (liquidity in), but after the $5 trillion ceiling raise, they’re about to flood us with fresh debt (liquidity out).” Target refill is $850 billion (because $350 billion just isn’t enough for these people), so we lose maybe $500 billion from the system. Who needs that money, right? Go long ramen noodles, I guess.

If you’re holding Bitcoin and feeling lucky—good for you. Historically, risk assets love when the Fed tosses dollars around like confetti and the dollar is stumbling around trashed, but now? Nah. Tomas is like, “Dollar should get stronger.” Of course! When you’re down, why not kick some digital coins?

It’s not going to happen overnight; it’s death by a thousand Treasury-bill cuts. They’re gonna blast the market with new short-term debt, just drowning the banks and money markets. Competition for funding! Who wants cash? NOT YOUR BANK.

Tomas tries to soften the blow: hey, maybe some cash leaves the Fed’s Overnight Reverse Repo Facility. There’s still $214 billion sitting in there doing nothing. Maybe Treasury Secretary Scott Bessent loses his nerve and drops the refill target a little. (He probably can’t even refill his printer with paper, but okay.) Maybe, just maybe, we trickle a little cash back into the system, but don’t bet your house on it.

Best case? Banks’ reserve balances are slipping below 10% of GDP. But hey, at least it’s not 2019 repo-crisis bad—just, you know, regular bad. Could be a little funding scuffle at the end of September, according to Tomas. Oh joy, just when people want to go apple picking.

Bitcoin, of course, did great when Fed liquidity was plentiful—no surprises there. It’s like that guy who’s only fun when someone else is pouring free drinks. Now we get to see what happens when the bar closes. Liquidity dries up, Treasury’s hungry, dollar’s flexing, and Bitcoin’s suddenly all “wait, I need support!”

Oh, and almost forgot—the whole world is betting against the dollar. Everyone’s short. You, your neighbors, someone’s dog walker—they’re all bearish. Tomas thinks this is a perfect setup for a dollar rebound. Of course, just when you’re sure, you’re wrong. Classic.

If the dollar does rocket up, Bitcoin’s gonna be feeling that macro headwind right in the teeth. Historically, it’s not exactly thriving when the dollar is marching around all high and mighty. So, yeah, tension’s high; stakes are higher.

The next few weeks? Gonna be hilarious, unless you’re long Bitcoin, in which case… well, sit down, maybe stop checking your phone for a bit. If Bessent chickens out and lowers the target, maybe it’s not a full-on disaster, but as it stands? $500 billion running for the exits. Maybe start liking gold, or I don’t know, canned food?

Current BTC price: $108,148. (Enjoy it, while you can.)

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2025-07-07 23:48