Arthur Hayes: The beautiful big bill may cause a temporary halt in the supply of US dollar liquidity, and the market may move sideways until August.

On July 3, Arthur Hayes published an article today pointing out that after Trump's spending bill (known as the "Beautiful Big Bill") was passed, the creation of dollar liquidity may experience a brief stagnation. Since January 1, the Treasury has continued to primarily fund the government by drawing from its checking account—the Treasury General Account (TGA). As of June 25, the TGA balance was $364 billion. According to the Treasury's guidance in its latest quarterly refinancing announcement, if the debt ceiling is raised today, the TGA balance will be replenished to $850 billion through bond issuance. This will result in a contraction of $486 billion in dollar liquidity. The only major dollar liquidity item that could mitigate negative impacts is the outflow of funds from the RRP account (currently at $461 billion). The bull run may be interrupted for a short time. From now until Jerome Powell's speech at the Jackson Hole Federal Reserve meeting in August, the market will trade sideways to slightly lower. If the TGA replenishment proves unfavorable to dollar liquidity, the downside could be between $90,000 and $95,000. If the replenishment is deemed meaningless, Bitcoin will hover around $100,000 without breaking through the historical high of $112,000. "I have a feeling that Powell will announce an end to quantitative tightening and/or other seemingly mundane but significant banking regulatory reforms." By early September, the debt ceiling will be raised, the TGA will essentially be replenished, and the Republicans will focus on distributing benefits so that they do not face the backlash from Mamdani in their districts in November 2026. By then, the green cross will pierce the shorts driven by a surge in currency issuance.