A recent report has sparked a fascinating debate about the primary driver of Bitcoin's price. The key insight? It's not the Federal Reserve or any central bank's balance sheet that wields the most influence. Instead, the report from crypto experts at Keyrock points to a different metric: Treasury bill issuance.
But here's where it gets controversial...
According to Keyrock's analysis, every 1% change in global liquidity levels has a significant impact on Bitcoin's price, specifically a 7.6% shift in the following business quarter. And this is where the story gets even more intriguing. Not all liquidity is created equal, says Keyrock researcher Amir Hajian.
The report reveals a strong correlation between Treasury bill issuance and BTC prices, with an impressive 80% correlation since 2021. This metric even predicts BTC price movements, leading by about eight months.
"When the Treasury increases its issuance of Treasury bills, it's essentially financing spending that trickles down into the real economy and, eventually, into risk assets like Bitcoin," the report explains.
However, there's a twist. Despite this high correlation, institutions and ETFs have somewhat muted Bitcoin's sensitivity to liquidity conditions, reducing its impact by around 23%.
This analysis challenges the widely held belief that interest rate policies set by the Federal Reserve are the primary liquidity drivers for risk asset prices. Instead, Keyrock forecasts that global liquidity will continue to influence BTC prices, with potential impacts expected in late 2026 and early 2027.
And this is the part most people miss...
Keyrock's report also highlights an "inflection" point in global liquidity, with a large portion of the $38 trillion US national debt maturing over the next four years. This means the US Treasury will likely need to refinance this debt at higher interest rates, which were initially financed under near-zero interest rates.
"T-bill issuance is projected to reach and sustain $600 billion to $800 billion per year through 2028," the report predicts.
So, what does this mean for Bitcoin's future? Will Treasury bill issuance continue to be the primary driver of its price? And how will institutions and ETFs continue to influence its sensitivity to liquidity conditions? These are the questions that remain, inviting further discussion and debate.
What are your thoughts on this report's findings? Do you agree that Treasury bill issuance is the key factor, or do you have a different perspective? Feel free to share your insights and opinions in the comments below!
