The question dominating crypto desks this week is whether the cycle is intact, 
and when the bull run will return. Two widely followed macro commentators 
sketched the same causal chain from public-sector cash management to crypto 
asset beta, arguing that the current drawdown is a liquidity story first and a 
sentiment story second—and that its reversal hinges on the mechanics of the US 
Treasury General Account (TGA), Federal Reserve balance-sheet policy, and the 
timing of Washington’s reopening. Crypto Market Awaits US Government Shutdown 
Resolution Macro analyst @plur_daddy on X summarizes the current state 
bluntly: “We are seeing the contraction in liquidity flowing through into risk 
markets. Naturally it first showed up in BTC and market internals within 
equities, and now is finally hitting the broader indices.” He describes a 
textbook quality rotation underway—speculative thematics “such as quantum, 
nuclear, drones, and alt energy have been getting destroyed,” while flows 
consolidate into the megacap cohort and earnings-backed momentum, notably the 
AI capex complex. The underlying plumbing, in his reading, is starved of bank 
reserves as cash piles into the TGA and quantitative tightening (QT) continues 
to shrink the Fed’s balance sheet. “Monetary liquidity is drawing down as the 
TGA has become overfilled beyond the Treasury Dept’s $850bn cap, due to 
mechanical factors around higher issuance, timing of specific payments, and 
the government shutdown. There is a broader lack of bank reserves which 
continues to fall below the key $3trn threshold.” His conclusion is 
conditional but clear: these stresses “will precipitate actions to calm market 
plumbing but it will take time.” Related Reading: Caution In The Crypto 
Market: Expert Warns Of Bearish Phase Unfolding This November On the dollar 
and cross-asset risk, he points to a crucial level: “The DXY has been rallying 
and is now approaching a key level at 101, which would be a logical point for 
it to top. I continue to believe the Trump administration wants a lower 
dollar.” The path to a crypto bottom, in his cadence, is explicitly tied to 
policy milestones: “The government reopening provides a clear catalyst to mark 
the bottom in liquidity conditions. Then, we get QT unwinding Dec 1 and then 
potentially more Fed actions (such as hints on bills repurchases) on Dec 10. 
The fiscal deficit will expand significantly starting Jan 1 as the OBBBA will 
fully kick in.” He characterizes Bitcoin’s behavior as resilient—“BTC has held 
in well despite tremendous OG selling, the aftermath of 10/10, and the factors 
above”—and describes his own playbook accordingly: “I currently have a sizable 
cash position and plan to aggressively add equities (especially the memory 
trade) and BTC once the government reopening looks imminent.” Hours later he 
added, “Bought some BTC. Seeing progress being made towards government 
reopening and signs that liquidity headwinds have peaked. Risk/reward here is 
strong with sentiment bombed out.” When The Liquidity Returns Raoul Pal, whose 
framework centers almost entirely on the global liquidity cycle, pushes the 
same thesis to its logical macro conclusion. “If global liquidity is the 
single most dominant macro factor then we MUST focus on that,” he writes, 
before distilling the next year of market structure into a single constraint: 
“REMEMBER — THE ONLY GAME IN TOWN IS ROLLING $10TRN IN DEBT. EVERYTHING ELSE 
IS A SIDESHOW. THIS IS THE GAME OF THE NEXT 12 MONTHS.” In Pal’s telling, the 
shutdown’s effect is immediate and mechanical—“the gov shutdown has forced a 
sharp tightening of liquidity as the TGA builds up with no where to spend it. 
This is not offset by the ability to drain the Reverse Repo (it is drained). 
And QT drains it further”—and crypto, as the highest-beta liquidity asset, 
takes the brunt. The pivot, he argues, is likewise mechanical once fiscal 
operations restart: “As soon as the gov shutdown ends, the Treasury begins 
spending $250bn to $350bn in a couple of months. QT ends and the balance sheet 
technically expands. The Dollar will likely begin to weaken again as liquidity 
begins to flow.” Related Reading: Crypto Isn’t Topping Yet: Arthur Hayes Says 
Stealth QE Is Near He layers on prospective policy and regulatory 
catalysts—“SLR changes free up more of the banks balance sheets allowing for 
credit expansion. The CLARITY Act will get passed, giving the crypto regs so 
desperately needed for large scale adoption by banks, asset managers and 
businesses overall. The Big Beautiful Bill then kicks in to goose the economy 
into the midterms”—and frames the global backdrop as additive, with China’s 
balance-sheet expansion and Japan’s policy mix supporting a broader risk 
rally. His tactical advice is to accept bull-market volatility without over- 
reacting: “Always remember the Dont Fuck This Up rules… and wait out the 
volatility. Drawdowns like this are common place in bull markets and their job 
is to test your faith. BTFD if you can.” The punchline comes down to a single 
indicator within his dashboard: “td:dr — When this number goes up, all numbers 
go up.” The through-line across both perspectives is the primacy of dollar 
liquidity—specifically, the interaction of Treasury cash balances, Fed asset 
purchases or run-off, and the available stock of bank reserves after the 
Reverse Repo Program has largely normalized. When the TGA rises without 
offset, it functions as a suction pump on aggregate reserves; when it falls as 
the Treasury spends, reserves rebuild, the marginal cost of leverage eases, 
and high-beta assets—crypto first—tend to outperform. Where does that leave 
the timing question implied by every red candle on crypto Twitter? Neither 
source offers a date, but both tether the next leg higher to the same 
sequence: a resolution in Washington that flips the TGA from hoarding to 
spending, visible easing in reserve scarcity as QT pauses or is unwound, a 
swerve lower in the dollar from resistance, and renewed fiscal impulse that 
re-steepens the growth impulse into 2026. At press time, the total crypto 
market cap stood at $3.38 trillion. Featured image created with DALL.E, chart 
from TradingView.com

When Will The Crypto Market Surge Again? Experts Predict The Timeline

Bipartisan efforts to refine crypto regulations could bolster US leadership in 
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The post US lawmakers to meet with Trump&#8217;s crypto czar to discuss market 
structure bill appeared first on Crypto Briefing.

US lawmakers to meet with Trump’s crypto czar to discuss market structure bill

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