With the Treasury General Account refill almost done, ‘up only can resume’: Arthur Hayes

Crypto markets have been somewhat muted as the U.S. Treasury drained liquidity from the system. But as it approaches completing its Treasury General Account (TGA) refill, something the former BitMEX CEO, Arthur Hayes, called a “liquidity drain,” the “up only” trajectory can get back on track.

The TGA is basically the government’s checking account at the Federal Reserve. When the TGA needs refilling, the Treasury issues new debt, effectively pulling liquidity out of the broader financial system.

In 2025, the Treasury set a refill target of $850 billion. Hitting that mark meant soaking up hundreds of billions in cash by selling Treasury Bills and bonds; cash that otherwise might have pumped up stock and crypto markets instead.

When the government’s checking account gets topped off, that money sits on the sidelines, unavailable for investors, and market liquidity contracts.

Did the TGA refill cause markets to stall?

Yes, at least in part. The TGA refill created a temporary liquidity vacuum. Bitcoin fell to around $113,500 after trading above $124,000 earlier in the year. The Nasdaq dropped roughly 1.4% as well. This drain synchronized with a pullback across most risk assets, not because of a dramatic change in fundamentals, but simply less cash sloshing around for speculation.

Meanwhile, the Federal Reserve announced its first rate cut of 2025, lowering the Fed funds rate to a range of 4.00%-4.25%. Markets expect at least two more cuts before year’s end.

This marks a clear shift away from two years of tightening, and historically, lower rates have been strong fuel for risk assets like stocks and crypto.

The Fed pointed to a slowing labor market and weakening economic data as key reasons for the cut, signaling that policy is moving to support growth again, even if inflation isn’t fully conquered yet.

The trillion-dollar firehose for crypto

Perhaps the biggest reason for the “up only” thesis: capital is waiting. Money market funds have swelled to a record $7.5 trillion as of mid-September 2025; money that’s been earning yield in low-risk settings but could be unleashed into stocks, bonds, or crypto as soon as risk appetites return.

When the liquidity tide turns, as it now appears to be doing, that cash has the potential to create a ferocious rally.

With the TGA refill largely complete, the liquidity drain is set to reverse. Combine this with a friendlier Federal Reserve and trillions of dollars parked on the sidelines ready to move, and the stage is set for new risk-on momentum.

The liquidity withdrawal is ending, the rate cut cycle has begun, and the market’s vast cash pile is primed to chase yield and upside once more. Or as Hayes puts it, “up only can resume.”

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