The U.S. Treasury "withdrawing" $600 billion in cash? Macro liquidity headwinds may extinguish the Bitcoin autumn market.

According to the latest report from Delphi Digital, as the U.S. Treasury prepares to significantly rebuild its General Account (TGA) at the Federal Reserve in the coming weeks, Bitcoin (BTC) may face a slowdown in performance for weeks or even months. This process involves a net new debt issuance of $500 billion to $600 billion, coupled with the possibility that the M2 Money Supply may peak in September, which will pose strong liquidity headwinds for the crypto market.

M2 Topping and the Historical Correlation with Bitcoin

M2 Money Supply: Global M2 is expected to peak in September, currently having fallen about 8% from the expected peak.

Historical pattern: Bitcoin often lags after the peak of M2, especially in situations where government bond issuance accelerates and liquidity is withdrawn from the financial system.

10-week offset model: shows a lagged correlation between BTC price and M2 changes.

Department of the Treasury Cash Reconstruction Plan: Withdraw $600 billion over two to four months

TGA Reconstruction Scale: $500 billion – $600 billion

Net tradable debt in the third quarter: over $1 trillion (initial balance low, cash inflow below expectations)

Funding Source Pressure:

1. The balance of the Federal Reserve's reverse repurchase agreements (RRP) has decreased from $2 trillion in 2023 to only $28.8 billion.

2. Foreign government bond buyers (China, Japan) have reduced their holdings by more than 400 billion USD since 2021.

3. The domestic market needs to absorb all the newly issued volume.

Stablecoin Contraction: Bitcoin's Liquidity Barometer

2023 Case: During the TGA supplement of 550 billion USD, the total Money Supply of stablecoins shrank to 51.5 billion USD, and the price of Bitcoin almost stagnated.

Current situation: Stablecoins hold over $120 billion in U.S. Treasury bonds, which serve both as a liquidity indicator and as a "buffer" for absorbing Treasury bonds.

Mechanism: The Ministry of Finance withdraws cash → Stablecoin issuers face redemption pressure → Liquidity in the crypto market decreases

Structural headwinds before 2025

The report indicates that the structural support in this cycle will be weaker than in 2023:

Bank balance sheet pressure: $482 billion in unrealized securities losses

Weakening foreign demand: China and Japan reduce their holdings of U.S. Treasury bonds, and domestic funds need to bear more issuance pressure.

Macro conclusion: M2 peaks + accelerated issuance of government bonds = Bitcoin's autumn performance under pressure

Potential Impact on the Crypto Market

Short-term (2024 Q4): Liquidity contraction may suppress the upward momentum of mainstream coins such as BTC and ETH.

Medium-term (by the end of 2025): With the completion of TGA replenishment, liquidity pressure is expected to ease.

Investor Strategy:

1. Be cautious when chasing highs, and pay attention to changes in U.S. Treasury issuance and stablecoin supply.

2. Pay attention to macro liquidity indicators (M2, RRP balance, TGA scale)

3. Consider a phased layout and wait for liquidity to warm up.

Conclusion

The U.S. Treasury's cash reconstruction plan and the accelerated issuance of government bonds will pose significant pressure on Bitcoin and the overall crypto market in the coming months. Although this liquidity headwind is considered temporary, the market may need to seek growth opportunities amid macro contraction and regulatory changes before the end of 2025. Investors should closely monitor the pace of U.S. bond issuance and the trend of stablecoin supply, as this will directly impact the funding and investment enthusiasm for crypto assets.