Bitcoin
Forget the Fed and ETFs – Treasury Secretary Janet Yellen Could Drop a $1.4 Trillion Bomb on the Price of Bitcoin and Crypto This Week
Bitcoin
Bitcoin
is set for a big change after last week’s halving of supply –with some predicting a $35 trillion earthquake is on the horizon.
Bitcoin price traded sideways after rising higher in the run-up to its historic four-year halving thanks to the debut of a fleet of bitcoin exchange-traded funds (ETFs) in sight of Wall Street that could be just getting started.
Now, as Congress considers a new encryption bill described as a “massive disaster”, US Treasury Secretary Janet Yellen, former chair of the Federal Reserve, could launch a $1 trillion bitcoin and crypto bombshell next week.
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US Treasury Secretary Janet Yellen has been declared the most important person to watch when… [+] deals with the price of bitcoin, according to legendary bitcoin and crypto trader Arthur Hayes.
AFP via Getty Images
“Forget the May Fed meeting, the [second quarter] the refund announcement comes out next week… if any of these three options happen, expect a rise in [stocks] and most importantly, a reacceleration of the crypto bull market,” legendary crypto trader and Maelstrom investment fund founder Arthur Hayes posted to of May.
“What games will Yellen play? Here are some options: 1. Stop issuing Treasury bonds by reducing the Treasury’s overall account to zero, which represents a $1 trillion liquidity injection. 2. Shift more loans into Treasury bills , which removes money from the reverse repurchase agreement, this represents a $400 billion liquidity injection. 3. The combination of 1 and 2, does not issue long-term bonds, only notes and runs the Treasury’s general account and the Treasury. reverse repurchase agreement at the same time, i.e. $1.4 trillion liquidity injection.”
The Treasury’s general account, a liability on the Fed’s balance sheet that must be offset by assets, is used by the government to meet payments. If it is deflated, it could act as a form of stimulus, potentially boosting risky assets like bitcoin.
“The Fed is irrelevant,” Hayes said, adding “you better respect” Yellen.
“The markets’ big focus shifts to the announcement about the overall Treasury bill level,” said Althea Spinozzi, head of fixed income strategy at Saxo Bank, in a preview of the quarterly refinancing announcement. visa by Coindesk.
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The price of bitcoin has soared over the past year, surpassing its previous record high of $69,000 per… [+] Bitcoin.
Forbes Digital Assets
Last year’s recovery in bitcoin’s price, from lows of $15,000 per bitcoin following the collapse of exchange FTX, to a new all-time high of more than $70,000, was largely driven by expectations of a rate cut. interest rates from the Fed and the debut of a fleet of long-awaited Wall Street spot bitcoin ETFs.
Recent economic data has all but eliminated chances of a US interest rate cut anytime soon, while flows into new bitcoin ETFs have all but dried up.
“This week’s crypto market remains bearish,” said Rachel Lin, chief executive of Singapore-based decentralized derivatives exchange SynFutures, in emailed comments.
“The bears sold off the strong rally we saw earlier in the week, and the long-awaited bitcoin halving came and went without any significant impact on price action. If we follow previous cycles, the weeks after the halving will see a sideways trend or of decline until bitcoin surpasses the previous high, which currently stands at $73,600.”