Forget The Fed And ETFs—Treasury Secretary Janet Yellen Could This Week Drop to $1.4 Trillion Bitcoin And Crypto Price Bombshell

Bitcoin
Bitcoin
is coiled for a major move following its halving supply cut last week—with some predicting a $35 trillion earthquake is on the horizon.

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The bitcoin price has traded sideways after charging higher in the run up to its historical, four-year halving thanks to the debut of a fleet of Wall Street spot bitcoin exchange-traded funds (ETFs) that could be just getting started.

Now, as Congress considers a new crypto bill described as a “huge disaster,” US Treasury Secretary Janet Yellen, a former Federal Reserve chair, could next week drop a $1 trillion bitcoin and crypto bombshell.

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MORE FROM FORBESLeak Reveals Another Huge Wall Street Bitcoin ETF Price Earthquake Could Be About To Hit CryptoBy Billy Bambrough

“Forget about the May Fed meeting, the [second quarter] recasting announcement comes out next week… if any of these three options happen, expect a rally in [stocks] and most importantly a re-acceleration of the crypto bull market,” legendary crypto trader and founder of Maelstrom investment fund Arthur Hayes posted to X, referring to the US Treasury’s general account refinancing deadline on May 1.

“What games will Yellen play, here are some options: 1. Stop issuing treasuries by running down the Treasury general account, to zero, that is a $1 trillion injection of liquidity. 2. Shift more borrowing to T-bills, which removes money from reverse repurchase agreement, that is a $400 billion injection of liquidity. 3. Combo of 1 and 2, issue no long term bonds, only bills and run down the Treasury general account and reverse repurchase agreement at the same time, that is a $1.4 trillion injection of liquidity.”

The Treasury general account, a liability on the Fed’s balance sheet that must be matched by assets, is used by the government to meet payments. If it is emptied, it can act as a form of stimulus, potentially pushing up risk assets like bitcoin.

“The Fed is irrelevant,” Hayes said, adding “you best respect” Yellen.

“The big focus for markets shifts towards announcement concerning the Treasury general account level,” Althea Spinozzi, head of fixed income strategy at Saxo Bank, said in a quarterly refinancing announcement preview seen by Coindesk.

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MORE FROM FORBES‘Huge Disaster’-Congress Just Introduced A Game-Changing Bill That Could Blow Up The Bitcoin Price And Crypto MarketBy Billy Bambrough

The bitcoin price rally over the last year, taking it from lows of $15,000 per bitcoin in the aftermath of exchange FTX’s collapse, to a fresh all-time high of over $70,000, was largely driven by expectations of a Fed interest rate cut and the debut of a fleet of long-awaited Wall Street spot bitcoin ETFs.

Recent economic data has almost erased the chances of a US interest rate cut any time soon while the inflows into the new bitcoin ETFs have almost dried up.

“This week’s crypto market continues to drift bearish,” Rachel Lin, the chief executive of Singapore-based derivatives decentralized exchange SynFutures, said in emailed comments.

“The bears have sold into the strong bounce back we saw earlier in the week, and bitcoin’s much-anticipated bitcoin halving came and went without any significant impact on the price action. If we go by the previous cycles, the weeks after the halving will see a sideways or declining trend until bitcoin breaches the prior high, which currently stands at $73,600.”