Bitcoin Steps Aside While Treasury Cash Flow Emerges as a Key Indicator – Here's Why.
The market focus has moved from Bitcoin to the US Treasury General Account (TGA). The TGA recently topped $1 trillion, creating a large liquidity gap. When the Treasury refills its account, dollars leave the broader system, draining liquidity. To avoid a 2026 recession, the government must release $150‑200 billion back into banks. Quantitative tightening has ended, and the Fed cut rates for the third time in 2025, lowering the target range to a three‑year low. A new $40 billion‑per‑month Treasury bill purchase program adds fresh liquidity. This pivot follows Bitcoin’s 35 % correction, while firms like Vanguard and Charles Schwab begin offering crypto products to millions of users, encouraging aggressive buying on dips. Bitcoin now trades about 18 % above its 2021 highs, lagging the NASDAQ. The BTC/NASDAQ ratio is near the weekly EMA, which currently supports price. After a strong breakout in 2024‑25, momentum stalled as AI‑driven tech stocks surged, but that rally is cooling. Analysts note the tech‑stock slowdown may let the BTC/NASDAQ ratio swing back toward Bitcoin. Early signs show small‑cap indices like the Russell 2000 beginning to outperform larger tech indexes. A favorable rotation could reignite Bitcoin’s upside in the coming weeks.