The possibility of an interest rate cut by the US Federal Reserve (Fed) in the near future in order to attract more liquidity to the US economy decreases with each new macro data announcement. According to Hayes, the most important thing for the USA is not the Fed anymore, but Treasury Secretary Janet Yellen.

On April 29, the U.S. Treasury Department will release quarterly refinancing documents that outline how the government will manage liquidity. At this point, two important liquidity sources are followed: Treasury General Account (TGA) and Reverse Repurchase Agreements (RRP). “As expected, tax revenues added nearly $200 billion to the TGA,” Hayes writes in his April 26 post.

“Forget the May Fed meeting, the Q2 2024 refinancing announcement will happen next week.” Withdrawing funds from the NPL, or RRP pool, allows money to re-enter the economy – a key incentive for the performance of risky assets and the rise of cryptocurrencies in particular.

Hayes argues that his main focus is Yellen, based on the theory that US dollar printing will accelerate towards the upcoming presidential election and beyond. A $1 trillion NPL drawdown, a $400 billion RRP, or a combination of both are on the table, which could potentially mean a total liquidity injection of $1.4 trillion.

“The Fed is irrelevant, Yellen is a big fixer, respect her,” Hayes concludes. “If any of these three options come true, expect a rally in stocks and, most importantly, a re-acceleration of the cryptocurrency bull market.”

Other players, on the other hand, expect Bitcoin’s entry into the mainstream to create a positive cycle for prices through a domino effect. Although US spot Bitcoin exchange-traded funds (ETFs) are the most successful ETF launch in history, they have not yet fully reached the potential investor base.

Bloomberg ETF analyst Eric Balchunas does not find the recent cooling in investment flows concerning BlackRock’s iShares Bitcoin Trust (IBIT), which has the largest asset under management in cryptocurrencies, to be alarming.

“Although IBIT’s daily inflow streak ended at 71 days, it continues to break records. Here’s a look at the best ETFs of all time by asset in the first 72 days after entering the market,” he writes, sharing with Bloomberg data.

“Of 10,698 U.S.-registered funds (including ETFs, mutual funds, covered funds), IBIT currently ranks No. 2 in year-to-date flows,” adds Balchunas.

While allocations are still low overall, Cathie Wood, CEO of ARK Invest, a spot Bitcoin ETF provider, believes the trend will accelerate.