- The Federal Reserve’s reverse repo balance is now almost zero.
- Future Treasury issuances may directly affect bank reserves.
- Supportive liquidity conditions could benefit cryptocurrencies.
Delphi Digital reports that the Federal Reserve’s RRP balance has plummeted from over $2 trillion to nearly zero, indicating a shift in liquidity conditions.
This transition affects Treasury bond issuance and cryptocurrency markets, potentially leading to a positive liquidity environment for assets like Bitcoin and Ethereum.
Federal Reverse Repo Balance Drops from $2 Trillion to Zero
The Federal Reserve’s reverse repurchase balance has fallen from over $2 trillion to nearly zero, according to Delphi Digital. This exhaustion of the liquidity buffer implies that future Treasury bond issuances or Treasury General Account (TGA) buildup will directly consume bank reserves.
The shift requires the Federal Reserve to choose between allowing reserves to decline, risking a rise in repo rates, or expanding its balance sheet to supply liquidity. The latter seems more plausible given historical precedent. This marks a significant change from prior liquidity withdrawals.
Easing Liquidities to Benefit Cryptocurrencies like Bitcoin and Ethereum
Did you know? The reverse repo facility was introduced by the Federal Reserve in 2013 to help manage short-term interest rates.
Bitcoin is currently trading at $92,382.47, with a market cap exceeding $1.84 trillion and a market dominance of 58.64%, as reported by CoinMarketCap. Over the past 24 hours, Bitcoin’s price decreased by 0.89%, while its 7-day performance shows a 1.73% increase. The 24-hour trading volume was $61.67 billion, though the trading volume declined by 19.97%.
Bitcoin(BTC), daily chart, screenshot on CoinMarketCap at 02:00 UTC on December 5, 2025. Source: CoinMarketCapAccording to the Coincu research team, the potential reduction in the TGA and shift in the Federal Reserve balance sheet policies could lead to favorable liquidity conditions for cryptocurrencies. This transition might enhance valuations for risk-on assets, such as Bitcoin and Ethereum, as liquidity becomes less restrictive.
| DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing. |
Source: https://coincu.com/analysis/fed-rrp-zero-crypto-impact/
