Treasury holds $1 trillion as Bitcoin faces a key liquidity test this week

Treasury’s financing decisions this week will test whether a possible year-end cash drawdown can ease Bitcoin’s funding backdrop. The government held about $1,016 billion at the Federal Reserve on Oct. 28, inside the range it had anticipated for late October.The potential relief depends on the cash assumptions Treasury updates in its Nov. 2 borrowing estimates and the issuance and buyback plans due Nov. 4. A drawdown can return reserves to banks, all else equal, while financing the government continues to place demands on cash and intermediaries.Bitcoin’s price was about $77,865 in CryptoSlate’s market data at 10:41 UTC on Nov. 2, below $80,000. At the Nov. 2 morning check, Treasury’s release calendar still displayed August estimates and listed both November announcements as forthcoming.The $166 billion gap and bank reservesThe Fed’s Oct. 29 balance-sheet release put the Treasury General Account (TGA), the government’s operating account at the central bank, at $1,016 billion on Wednesday, Oct. 28.Treasury’s Aug. 3 borrowing forecast assumed an $850 billion cash balance at the end of December alongside $628 billion of privately held net marketable borrowing in the fourth quarter. Su...