The Bitcoin Layer US Treasuries MUST STABILIZE for Bitcoin to Move Higher
23 snips
Jan 6, 2026 Explore the crucial link between US Treasury stability and Bitcoin's potential growth. Learn how repo markets, bond volatility, and inflation trends influence liquidity. Delve into how year-end funding stress and the Fed's decisions impact leveraged Bitcoin buyers. Discover the significance of stable repo rates against the backdrop of rising interest expenses and government spending dynamics. The discussion also highlights the implications of Treasury issuance strategies and stable inflation on future Bitcoin demand.
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Repo Is The Marginal Dollar
- The repo market is now the marginal dollar rate and spikes at month/quarter/year-end due to regulatory window dressing.
- Nik Bhatia says these calendar spikes show funding scarcity but are manageable when the Fed pivots to balance-sheet expansion.
Anticipate Fed Balance Sheet Expansion
- Expect the Fed to expand its balance sheet by buying bills to keep repo inside its corridor.
- Nik Bhatia advises that this reserve management will act like QE and supply cash to stabilize funding.
Fed Will Favor Bills Over Long Bonds
- The Fed will increase its Treasury bill holdings relative to longer-duration notes and mortgages.
- Nik Bhatia notes this bill-heavy purchase program creates reserves and effectively prints money into the banking system.