Currently the debt of the US lays at around $31.4 trillion. You can see the culmination on debt over the last decades here: fred.stlouisfed.org/series/GFDEBTN
The Congressional Budget Office (CBO) predicts that this will rise 132% in 10 years and 200% by 2053
An Agreement has been met to raise the debt ceiling once more. This is a 2 year deal that suspends the ceiling into January 2025.
How will this work?
If they need money they will need to take more debt. They do so by issuing Treasury bills, currently this is the go to funding for the US. They are expected to issue as much as $1 trillion dollars in June 2023.
The initial rate will be paying 5.25% interest, but if there is no demand this will be raised more.
What will they do with the money raised?
Well first of 50% ($500 billion) of the money raised will go into paying the interest on existing debt, exactly like a Ponzi scheme. The other 50% will actually top off the treasury cash balance.
What does this mean for the market.
The white image indicates the US Treasury Account Balance which you can see on : fred.stlouisfed.org/series/WTREGEN
Depending on what happens with the money in the treasury, different effects are seen on the overall market, crypto, stocks. If you compare the two charts you will see different effects on BTC when the white chart is rising and when it is falling.
Rising: Means the liquidity is leaving the markets, going into the Treasury.
Falling: Means liquidity is entering the market and that money is being spent.
-March 2020 Covid Crash:
Printing Starts, the treasury is being filled up over a course of 4 months.
Meanwhile MAY 2020: BTC Halvening occurs!
-August 2020 Spending Starts: The liquidity is slowly entering the market.
-October 2020 Bull Starts: First consecutive green weeks start appearing. Spending increases
-November 2021 Treasury Empty & BTC Top. Specifically since October 2021 the Treasury has no money anymore to funnel into the markets. Consequently this is when the BTC top hits.
-End December 2021 Treasury starts filling UP: You can see a sharp rise in the Treasury balance sheet timed with a sharp decline in BTC from the deadcat bounce.
-November 2022 BTC 15K Bottom: Timed with the time the Treasury starts funneling money back into markets.
-January 2023 BTC pump: Midway the spending BTC starts pumping from its most recent bottom as money keeps being spent.
-June 2023 Treasury Starts to Fill UP again…
While the Treasury decisions are not an exact indicator of market moves they seem to have a delayed effect on the market as seen when comparing those two charts.
A delayed reaction by the market can be expected. If we are to follow the analysis above then the logical conclusion would be that there is not sufficient liquidity for a bullmarket. We would have to wait for the Treasury to start spending again. If i were to speculate: A crab market with a slightly higher new high and maybe some red months, nothing major. Alts might suffer more and BTC Dominance might breaking out from the 49-50 % resistance area.
Most intriguing part is how well the market top was timed with an empty treasury. Something to pay attention to when we finally enter the next bull cycle.
Additionally, dont forget the next halvening is predicted to be around April 2024.
Personally making sure i have my Bull Bags ready at all times. BTC has never existed in such market conditions before, and it was partially created to help safeguard its holders from such scenarios.
More small banks will likely crumble in the next months. BTC likes that i believe.
At the same time the threat of war looms as well.
Regardless, keep stacking those bags, our time will come.
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