TGA's $850B Threshold: Liquidity Drain Ends, Crypto Rally Begins?

Eight artificial intelligence models have reached a consensus that Bitcoin (BTC), Solana (SOL), Chainlink (LINK), Ethereum (ETH), and XRP are poised for significant gains in the fourth quarter of 2025. This forecast aligns with analyses of macroeconomic liquidity shifts, particularly the U.S. Treasury’s General Account (TGA) nearing a $850 billion threshold, which experts suggest could trigger a renewed influx of capital into crypto marketsArthur Hayes Believes Crypto Will Soar Once the Treasury Hits 850B^[1]. The TGA, the Treasury’s primary operating account, has surged past $816 billion as of September 18, 2025, with Arthur Hayes, co-founder of BitMEX, labeling the $850 billion mark a critical liquidity turning pointArthur Hayes Believes Crypto Will Soar Once the Treasury Hits 850B^[1]. Hayes argues that once the Treasury completes its cash buildup, liquidity will return to risk assets, setting the stage for a crypto rallyArthur Hayes Believes Crypto Will Soar Once the Treasury Hits 850B^[1].

The TGA’s liquidity dynamics have historically influenced market behavior. In 2023, a $550 billion TGA refill was cushioned by robust buffers such as the Fed’s Reverse Repo Facility and strong bank reserves. However, these buffers have diminished, leaving markets more vulnerable to liquidity shocksThis Little-Known Plan By The US Treasury Could Derail The Bitcoin …^[2]. Marcus Wu of Delphi Digital warns that the current TGA refill—projected to reach $500–600 billion by late 2025—could strain stablecoin supply and amplify volatility in higher-beta tokens like ETHThis Little-Known Plan By The US Treasury Could Derail The Bitcoin …^[2]. Wu outlines a four-phase scenario: resilience in late August, a sharp September liquidity drain, October–November fatigue with potential stablecoin contraction, and a recovery phase by DecemberThis Little-Known Plan By The US Treasury Could Derail The Bitcoin …^[2].

Stablecoins, now major buyers of U.S. Treasuries, add complexity to the liquidity equation. Tether and Circle collectively hold over $120 billion in U.S. government debt, with demand projected to rise to $1 trillion by 2028This Little-Known Plan By The US Treasury Could Derail The Bitcoin …^[2]. This feedback loop could either stabilize or exacerbate crypto markets, depending on whether stablecoin supply expands or contracts during the TGA refill. If stablecoin balances grow alongside the TGA, crypto may absorb the liquidity drain more effectively; a contraction, however, could accelerate market stressTreasury to Drain $500B From Markets With TGA Refill, Crypto …^[3].

Arthur Hayes’ bullish thesis posits that the TGA’s $850 billion target marks the end of a liquidity drain, with capital subsequently flowing into crypto assetsCrypto ready for 'up only' mode once US TGA hits $850B target: …^[4]. However, this view is contested. André Dragosch of Bitwise Asset Management argues that net liquidity has a “loose correlation” to Bitcoin and altcoins, cautioning against oversimplified narrativesWill $850B In The TGA Trigger A Crypto Rally - cointribune.com^[5]. The debate reflects broader uncertainties in crypto’s macroeconomic sensitivity, with factors like institutional adoption and regulatory developments also playing pivotal rolesCrypto Rally Imminent: $850B Treasury Target Key - Archyde^[6].

The Federal Reserve’s rate-cutting cycle further complicates the outlook. A 25-basis-point rate cut in July 2025 triggered a short-term dip in Bitcoin, illustrating the “sell-the-news” effectArthur Hayes Predicts 'Up Only' Bitcoin Market After TGA Target^[7]. Market expectations for additional cuts—91.9% of traders anticipate a 50-basis-point reduction at the October FOMC meeting—suggest ongoing liquidity tailwindsArthur Hayes Predicts 'Up Only' Bitcoin Market After TGA Target^[7]. Yet, the interplay between the TGA and Fed policy remains delicate. Hayes’ “up only” scenario hinges on both the Treasury’s liquidity normalization and the Fed’s dovish stanceCrypto Rally Imminent: $850B Treasury Target Key - Archyde^[6].

Analysts remain divided on the magnitude of the potential rally. While the AI models’ consensus highlights BTC, SOL, LINK, ETH, and XRP as top performers, the path to this outcome depends on stablecoin dynamics, stablecoin-Treasury feedback loops, and macroeconomic clarityTreasury to Drain $500B From Markets With TGA Refill, Crypto …^[3]. The coming months will test whether crypto markets can withstand the liquidity pressures of the TGA refill and emerge into a sustained bullish phase.