Keyrock: Treasuries influence Bitcoin's price more than the Fed - ForkLog: cryptocurrencies, AI, singularity, the future

# Keyrock: Treasuries influence Bitcoin’s price more than the Fed

The “printing press” does not always significantly impact the quotes of risky assets — much depends on the mechanism of distributing fresh liquidity.

The issuance of US Treasury bills (T-bills) has become a key indicator of liquidity, determining the dynamics of digital gold. At the same time, the state of the Fed’s and other central banks’ balance sheets plays only a secondary role, according to market maker Keyrock analysts.

Impact of T-bills

According to research, a 1% change in global liquidity triggers a 7.6% movement in the price of the first cryptocurrency in the next quarter. However, Keyrock expert Amir Hadjian emphasized that not all types of financial injections impact high-risk assets equally.

The report states that since 2021, the correlation between T-bill issuance and Bitcoin price has reached 80%. Meanwhile, the issuance of government bonds serves as a leading indicator with a lag of about eight months.

“When the Treasury increases bill issuance, it funds expenses that enter the real economy, and then — into risky assets like Bitcoin. If issuance falls or goes negative, this fiscal stimulus diminishes,” Hadjian explained.

Impact of T-bill issuance on Bitcoin price compared to other liquidity-increasing methods. Source: Keyrock. Historically, the growth of net treasury bond issuance has been a leading indicator of Bitcoin’s dynamics. Institutional capital and spot ETFs have reduced Bitcoin’s sensitivity to liquidity changes by about 23%. Despite maintaining the correlation, macroeconomic factors have become less influential on the asset.

These findings contradict the popular view that the movement of digital gold primarily depends on the Fed’s interest rate. Analysts expect that the full impact of global liquidity factors on Bitcoin’s price will only be reflected by the end of 2026 or early 2027.

Relationship between treasury issuance and Bitcoin price. Source: Keyrock.## Repayment of US national debt and liquidity inflows into markets

Global liquidity is on the verge of significant changes, according to Keyrock analysts. In the next four years, a substantial portion of US government debt will mature, with the total exceeding $38 trillion.

The US Treasury will need to refinance this burden. Since a large part of current obligations was formed during near-zero interest rate periods, new loans will cost the agency significantly more.

Dynamics of US Treasury bill issuance from 2021 to 2028; analysts forecast an increase in issuance rates. Source: Keyrock. Keyrock expects the US to increase Treasury bill issuance to service the national debt. Analysts forecast that by 2028, the annual issuance volume could stabilize at $600 billion to $800 billion.

Recall that recent inflation data in the US temporarily boosted Bitcoin’s price.