A fund manager has issued a stark warning: Bitcoin's ongoing selloff may deepen as upcoming U.S. Treasury settlements are expected to drain roughly $150 billion in liquidity from the financial system. Michael Kramer, founder and CEO of Mott Capital Management, said in his latest market analysis that Bitcoin tends to be a better liquidity indicator than most other instruments, and if Treasury settlements drain liquidity, Bitcoin could head much lower.
Details of the Liquidity Drain
The U.S. Treasury regularly issues bonds and bills to finance government spending. When new securities are sold, cash from investors moves into the Treasury's account at the Federal Reserve, pulling liquidity out of the banking system. According to Kramer, Treasury operations from May 28 to June 5 could result in a roughly $150 billion liquidity drain. The breakdown: $15 billion in T-bills settling on Thursday, May 28; $47 billion in coupon settlements on Friday, May 29; $68 billion on Monday, June 1; $16 billion in T-bill settlements on Tuesday, June 2; and another T-bill settlement on June 4 estimated between $5 billion and $15 billion.
Markets — including crypto — tend to perform best when liquidity is abundant. When cash is pulled from the system, even temporarily, investors often turn more cautious, reducing appetite for risk assets like Bitcoin.
BTC Already Down 11% from Peak
Early signs of this pressure are visible. Bitcoin has dropped about 11% since hitting highs above $82,500 earlier this month and was trading near $73,000 at press time. Kramer notes that the recent breakdown of key support near $75,000 is a clear signal that liquidity conditions are tightening. While this doesn't guarantee a deeper decline, it underscores an important point often overlooked in crypto circles: Bitcoin does not trade in a vacuum — macro forces like government borrowing and resulting cash flows can quietly exert significant influence on prices.
For everyday investors, the key takeaway is simple: sometimes the biggest driver of Bitcoin's price isn't a crypto-specific headline, it's macro forces moving in the background.