The Bitcoin Layer Repo Market MELTDOWN? Gold’s Move Signals Something BIG
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Oct 16, 2025 The repo market is showing signs of stress, with rising spreads indicating emerging reserve scarcity. Gold's unprecedented surge toward $4,300 raises serious questions about liquidity and potential crises. The Fed's repo facility activation hints at real funding market stress, while a tighter repo market could impact risk assets like stocks and Bitcoin. Nik connects falling treasury yields to rising gold prices, suggesting a complex web of economic signals that could point to a deeper financial issue. It's a wild ride through macroeconomic turbulence!
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Repo Corridor And SOFR Are The Real Rates
- The repo corridor is a policy range where the Fed nudges market repo rates rather than sets them.
- SOFR is the key wholesale financing rate because banks borrow overnight against Treasury collateral.
SOFR Breaks Above The Fed's Ceiling
- SOFR trading above the Fed's discount rate shows the ceiling isn't fully effective.
- Repo deals occurred at yields above the Fed's intended cap, signaling market stress.
14bps Spread Signals Reserve Scarcity
- A 14 basis point spread between SOFR and IORB shows banks demand a premium to lend reserves.
- Large banks like JP Morgan will only lend reserves when the spread compensates for scarcity and operational needs.