US Treasury Bill Auctions and Crypto Markets: Navigating the Impact of T-Bills on Cryptocurrencies – Coinpedia Fintech News

On Wednesday, the U.S. House of Representatives managed to secure the backing of both Democrats and Republicans and successfully passed a bill that seeks to temporarily suspend the $31.4 trillion debt ceiling. Right after this, the U.S. Treasury Department didn’t wait long to start offering Treasury bills immediately.

On June 5, the U.S. Treasury is prepared to hold an auction for $173 billion worth of short-term Treasury bills as part of its efforts to replenish its diminished cash reserves. It anticipates reaching a total of $1 trillion in Treasury bills by the conclusion of the third quarter.

US Treasury Bill Auction and Decline in Cash Reserves

According to the auction schedule released by the U.S. Treasury Department, there will be a Treasury bill auction on June 5. The auction will include three different types of treasury bills: a 13-week bill worth $65 billion, a 26-week bill worth $58 billion, and a 44-day bill worth $50 billion.

The cash reserves in the US Treasury General Account experienced a significant decline, dropping from $635.99 billion in March to $22.89 billion on June 1. This decrease indicates a substantial reduction in available funds. Risky assets, including cryptocurrencies like Bitcoin, may face increased volatility and potentially lower returns due to the rise in Treasury yields and the strength of the US dollar.

Impact On The Financial Markets 

By the end of the third quarter, it is anticipated that the US Treasury will release approximately $1 trillion in T-bills. This influx of Treasury bills is likely to have an impact on the financial market by reducing the availability of US dollar liquidity. Consequently, this development raises concerns about an increased risk of a recession occurring.

The yields on US Treasury bonds are currently on the rise, and today the US Dollar Index (DXY) reached a high of 104.35, surpassing the 104 mark. At the same time, the futures market for US stocks suggests a relatively stable opening on Monday. However, there has been a notable upward movement in the prices of oil and natural gas, which have experienced an increase of over 2%.

The price of BTC dropped 2% during the last day and is now trading at $26,761. Bitcoin has a 24-hour low of $26,712 and a 24-hour high of $27,407, respectively. Also, after surging beyond $1900 last week, the price of ETH has fallen to the prior support level. The price is currently $1870, down 2% from the previous day.

The market now depends on the Federal Reserve and its decision on federal rate hikes. Predictions suggest a huge possibility of skipping rate hikes this month.

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