What Bitcoin Did Bitcoin & The Coming Liquidity Boom | Nik Bhatia
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Oct 24, 2025 Nik Bhatia, a financial researcher and author of 'Layered Money' and 'The Bitcoin Age,' dives deep into the implications of recent repo market spikes and liquidity trends. He explains how the Fed’s mechanics impact reserve scarcity and why banks are hoarding funds instead of lending. Bhatia predicts a private credit boom that could fuel U.S. growth and inflation while enhancing Bitcoin’s status as collateral. He also discusses the geopolitical signals behind gold's rally and Bitcoin’s evolving role in an unpredictable macro environment.
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Repo Spread Reveals Reserve Scarcity
- A rising repo–IORB spread signals banks hoarding reserves and reserve scarcity in the system.
- That scarcity can destabilize funding markets because treasuries need nightly funding to avoid collapse.
The Fed's Corridor Controls Short Rates
- The Fed sets a corridor: IORB as a floor and the discount/standing repo as a ceiling to guide market rates.
- Fed funds is a transaction-based rate that can drift and signal reserve stress when it ticks up.
Calendar Events Trigger Repo Stress
- Calendar events like month‑end, quarter‑end and tax days regularly spike repo demand and push rates above the corridor.
- The 2019 repo spike led to the standing repo facility, which is now being tested with small usages.
