Analysis: The U.S. Treasury is set to withdraw $500-600 billion in cash from the market over the next two months, potentially leading to increased market illiquidity.
BlockBeats News, August 20th. Delphi Digital Market Research Institute published an article stating that in the coming weeks, the US Treasury Department will begin replenishing its General Account (TGA), a process that will withdraw $500–600 billion in cash from the market over approximately two months. At first glance, this may seem ordinary, but the current period is evolving into one of the most fragile liquidity environments of the past decade.
In 2023, the $550 billion TGA replenishment was cushioned by over $2 trillion of Fed reverse repo tools, healthy bank reserves, and robust overseas bond demand. Now, these cushions are no longer in place. The Fed is still consuming liquidity through Quantitative Tightening (QT), reverse repos are nearly exhausted, banks are constrained by losses and capital rules, and overseas buyers from China to Japan have also exited. The result is that every dollar raised by the Treasury Department this fall will be directly extracted from active market liquidity.
High-beta tokens tend to amplify downward movements during liquidity tightening. If stablecoin supply contracts during the TGA replenishment period, ETH and other high-risk assets may experience larger declines compared to BTC unless there is structural inflow of funds from ETFs or corporate treasuries. In a low-liquidity environment, position management and capital rotation across risk curves are more critical than ever.
If stablecoin expansion coincides with TGA rising, the crypto market may be more resilient to absorb the impact compared to previous cycles; if stablecoins contract, liquidity extraction will transmit faster and more intensely.
You may also like

How to View the Neobank Era Post Crypto Boom?

《The Economist》: In Asia, stablecoins are becoming a new financial infrastructure

Why Most Cryptocurrencies Are Designed to Be Non-Reinvestment Assets

From Lloyd's Coffee House to Polymarket: Prediction Markets are Rethinking the Insurance Industry

a16z Partner Manifesto: Boutique VC is Dead, Go Big or Go Home

Untitled
I’m sorry, but it appears there’s no actual content from the original article provided for me to rewrite.…

Bitcoin Experiences Record 23% Decline in Early 2026
Key Takeaways Bitcoin has experienced a record-setting decline of 23% in the first 50 trading days of 2026.…

Whale Holding 105,000 ETH Faces $8.5 Million Loss
Key Takeaways A significant Ethereum holder, often termed a “whale,” has accumulated long positions in 105,000 ETH. The…

Bitcoin Faces Liquidity Challenges as $70,000 Rebound Struggles
Key Takeaways Bitcoin’s attempts to break the $70,000 mark face significant challenges due to weak liquidity and market…

Newly Created Address Withdraws 7,000 ETH from Binance
Key Takeaways A newly created cryptocurrency address withdrew 7,000 ETH from Binance within an hour, totaling $13.55 million.…

Balancer Halts reCLAMM-Linked Liquidity Pools for Security Check
Key Takeaways Balancer has temporarily halted reCLAMM-related liquidity pools due to security concerns. A report from the bug…

Whales Take on Ethereum: Major Profits from Leveraged Short Positions
Key Takeaways Three Ethereum whales are collectively reaping over $24 million in unrealized profits from short positions. The…

SlowMist Unveils Security Vulnerabilities in ClawHub’s AI Ecosystem
Key Takeaways SlowMist identifies 1,184 malicious skills on ClawHub aimed at stealing sensitive data. The identified threats include…

Matrixport Anticipates Crypto Market Turning Point as Liquidity Drains
Key Takeaways Matrixport notes a surge in Bitcoin’s implied volatility due to a sharp price drop. Bitcoin price…

Bitmine Withdraws 10,000 ETH from Kraken
Key Takeaways A newly created address linked to Bitmine withdrew 10,000 ETH from Kraken. The withdrawal value amounts…

In the face of the Quantum Threat, Bitcoin Core developers have chosen to ignore it

Don't Just Focus on Trading Volume: A Guide to Understanding the "Fake Real Volume" of Perpetual Contracts

Crypto Price Prediction Today 18 February – XRP, Bitcoin, Ethereum
Key Takeaways XRP’s potential as a replacement for SWIFT is bolstered by regulatory approvals, potentially driving its price…
How to View the Neobank Era Post Crypto Boom?
《The Economist》: In Asia, stablecoins are becoming a new financial infrastructure
Why Most Cryptocurrencies Are Designed to Be Non-Reinvestment Assets
From Lloyd's Coffee House to Polymarket: Prediction Markets are Rethinking the Insurance Industry
a16z Partner Manifesto: Boutique VC is Dead, Go Big or Go Home
Untitled
I’m sorry, but it appears there’s no actual content from the original article provided for me to rewrite.…