The Bitcoin Layer INTEREST EXPENSE EXPLODES: Why The Fed Must Cut & What It Means For Bitcoin
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Dec 5, 2025 Nik explores the Fed's imminent rate cut amidst soaring Treasury interest expenses. He highlights how easing repo conditions and a weak dollar could steer Bitcoin closer to $90,000. Insight into bond volatility and debt dynamics reveals why lower rates are on the horizon. Additionally, he examines the relationship between TBL liquidity signals and Bitcoin's performance, suggesting a bright future as the liquidity cycle turns. Will 2025 see Bitcoin's journey towards $1 million continue?
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Repo Tightness Signals Scarce Reserves
- Repo market tightness shows a scarcity of reserves that pushed repo rates above the Fed's corridor.
- Easing TGA balances and the Fed pausing QT have reduced that pressure and point toward lower repo rates after the cut.
QT Pause Eases Treasury Market Strain
- The Fed stopping QT converts maturing securities into reinvestments rather than balance-sheet shrinkage.
- That action is a positive flow for Treasury market functioning but only becomes reserve expansion when the Fed formally manages reserves.
Monitor Fed Reserve Management Language
- Watch Fed language on reserve management during the next meeting for signals about balance-sheet policy.
- Use that guidance to anticipate how the Fed might address repo tightness and Treasury market mechanics.