Cryptocurrency markets experienced a downturn after the US Ministry of Finance reduced liquidity in the system. However, with the Treasury General Account (TGA) approaching its refill, the “liquidity outflow” described by former Bitmex CEO Arthur Hayes may soon resume. The TGA serves as the government’s checking account in the Federal Reserve, and when it needs to be refilled, the Ministry of Finance issues new debt, effectively pulling liquidity out of the financial system.
In 2025, the Ministry of Finance set a refill target of $850 billion, which involved selling hundreds of billions of dollars in treasury bills and bonds, thereby reducing the cash available for stock and crypto markets. As a result, investors had less money to speculate, leading to a contraction in market liquidity.
Impact of the TGA Refill on Markets
The TGA refill has had a partial impact on the markets, creating a temporary liquidity vacuum. Bitcoin prices fell to around $113,500 after being traded over $124,000 earlier in the year, while the Nasdaq declined by approximately 1.4%. This synchronized withdrawal from risk assets was not due to a dramatic change in fundamentals but rather a decrease in available cash for speculation.
Meanwhile, the Federal Reserve announced its first interest rate reduction of 2025, lowering the Fed funds rate to a range of 4.00%-4.25%. The markets expect at least two more cuts before the end of the year, which could provide a boost to risk assets like stocks and crypto.
A Trillion-Dollar Firehose for Crypto
A significant factor supporting the “up-only” thesis is the availability of capital. Money market funds have risen to a record $7.5 trillion in mid-September 2025, with this money potentially being deployed quickly as risk appetite returns to stocks, bonds, or crypto.
As the liquidity floodgate opens, this money has the potential to create a significant rally. With the TGA refill largely completed, the liquidity outflow is poised to reverse. Combining this with a more dovish Federal Reserve and trillions of dollars waiting on the sidelines, the stage is set for new risk dynamics.
The end of liquidity deprivation, the start of the interest-rate reduction cycle, and the massive stack of cash in the market ready to pursue returns all suggest that the “up-only” trend can resume. As Hayes puts it, “can only go up.”
For more information, visit https://cryptoslate.com/with-the-treasury-general-account-refill-almost-done-up-only-can-resume-arthur-hayes/
