From Washington to the Chain: How Macro Liquidity Shapes Bitcoin ｜CEEX Observation

# 1. From Budget Tug-of-War to K-Line Plunge: When Money is Stuck in TGA, Bitcoin Catches a Cold

Many people first realized the "invisible pipeline from Washington to the blockchain" during the recent U.S. government shutdown. The U.S. Treasury opened a large "checking account" at the Federal Reserve called TGA, where all tax revenues and bond issuance income first flow into this large pool, and then through various fiscal expenditures, it reaches businesses and residents. In normal years, TGA acts more like a fund transfer station, with money flowing in and out, eventually landing in the commercial banking system, becoming bank reserves, and serving as one of the sources of market liquidity.
The government shutdown disrupted this rhythm: the Treasury continued to collect money and issue bonds, causing the TGA balance to rise, but the budget was stuck in Congress, and a large amount of spending could not be executed, effectively locking the money in a black hole that could only take in but not release. Recent statistics show that since the shutdown in October, the TGA balance has surged from about $800 billion to the trillion-dollar level, equivalent to several hundred billion dollars being withdrawn from the financial system, resembling a small-scale "quantitative tightening."
After bank reserves were siphoned off, the overnight funding market began to heat up, with both SOFR rates and the usage of the Standing Repo Facility (SRF) soaring. Banks were willing to pay higher costs to borrow money just to ensure they wouldn't run out of funds overnight. Pressure slowly transmitted along the credit chain, first impacting already fragile areas like commercial real estate and subprime auto loans, and only later appearing in the technology stocks and cryptocurrency markets you are familiar with.
For on-chain assets, the most sensitive perception often comes from futures leverage. Just when there were comforting remarks that "the bull market is just a normal adjustment," tens of billions of dollars in forced liquidations occurred, wiping out long positions in one wave. TGA acts like a blood pump; as Washington locks in more cash, exchanges see more long upper or lower shadows, while newcomers only see "the market is too grim," and veteran traders envision a more boring picture: the Treasury account balance curve.
The shutdown will eventually end, and the budget will be passed one day, leading to a resurgence of suppressed fiscal spending into the market. Macro traders like Raoul Pal and Arthur Hayes almost unanimously describe the current phase as a "pain window": the first half is characterized by dual tightening from fiscal and central banks, along with a period of funding scarcity; once the second half switches to a reflation mindset, liquidity will have to accommodate the rolling issuance of trillions in government bonds, and risk assets will be forced to absorb the newly released liquidity.
For newcomers still reading white papers, the key is not to focus on the specific tools represented by each abbreviation, but to remember one piece of advice: When there is an unconventional large accumulation in the fiscal account, Bitcoin often undergoes a painful adjustment period; only after the government reopens and spending normalizes does it tend to be the turn of on-chain assets to recover.

# 2. The M2 Curve as a Metronome: Global Liquidity Lifts, Bitcoin Amplifies

Zooming out from Washington, global liquidity has quietly been sketching a "blueprint" for Bitcoin for years. Research institutions have combined the M2 money supply of major economies such as the U.S., Eurozone, Japan, and China to create a so-called "Global Liquidity Index." Multiple research reports have reached similar conclusions: from 2013 to 2024, the correlation between Bitcoin prices and global M2 indicators is close to 0.94, which can be simply translated into "almost in the same direction."
From a timeline perspective, the story becomes even more intuitive. In the post-pandemic years of 2020-2021, central banks around the world engaged in large-scale easing to support the economy, causing global M2 to surge in a short time, and Bitcoin simultaneously embarked on an epic bull market. Starting in 2022, the cycle of interest rate hikes and balance sheet reductions began, liquidity was withdrawn, and Bitcoin retraced 70-80% from its peak, forming a standard "high-altitude plunge" trajectory. Analysis from S&P Global even directly overlaid the Federal Reserve's balance sheet with Bitcoin prices, pointing out that the significant rise in 2017 and the crash in 2018 corresponded to the turning points of easing and tightening.
Entering 2024, the curve has once again shown interesting inflection points. Institutions like Bitget have reported that global M2 has accelerated expansion since the beginning of 2024, expected to reach a historical high of approximately $112 trillion by mid-2025, during which Bitcoin's cumulative increase has exceeded 100%. Coinbase's research team even constructed a "Global M2 Liquidity Index," estimating that this index leads Bitcoin by about 110 days: the index rises first, and after three to four months, Bitcoin's price catches up with the sentiment.
Macro trader Raoul Pal has provided a vivid analogy: Bitcoin is more like a "high beta chip stock" in the global liquidity cycle. In each phase of rising global M2, it first pulls up the most core assets (government bonds, equities), followed by high-risk assets showing even more exaggerated gains; once the liquidity slope flattens or even retreats, Bitcoin often adjusts first, ringing the alarm for the entire risk curve.
Many newcomers may ask, "Does that mean I can mindlessly bet whenever I see M2 rising?" The reality is always more complex. M2 is just a broad indicator, intertwined with inflation, unemployment rates, political cycles, and a whole set of narratives, and an increase in money supply does not mean that every unit of new funds will flow into the blockchain. For retail investors, rather than treating M2 as a universal predictor, it is better to use it as a "background noise filter": when the index rises rapidly, if there is an extreme panic day in prices, it often indicates a mid-course reshuffle; when the index begins to peak or even retreat, if there are exaggerated euphoric days in the market, the risks are no longer just friendly.

# 3. New Water Pipes: ETFs and Stablecoins Directly Connect Macro Water Levels to the Blockchain

The macro reservoir determines whether there is more or less water, but whether it can flow to Bitcoin increasingly depends on several new water pipes: spot ETFs, stablecoins, and exchanges.
First, let's look at ETFs. Since the beginning of 2024, when the U.S. approved the first batch of spot Bitcoin ETFs, traditional financial capital has gained a more "decent" entry channel. In the first three months, products led by funds like BlackRock and Fidelity attracted over $15 billion in net inflows, with trading volumes even approaching those of mature gold ETFs. By the fall of 2025, statistics showed that the cumulative net inflow of various spot BTC ETFs in the U.S. had reached approximately $61 billion, with total trading volume nearing $1.5 trillion, and the single-day record for net inflows was recently refreshed to $524 million.
From the perspective of an individual retail wallet, ETFs may seem like just an additional "fund code to buy BTC." However, from a macro perspective, the significance is much deeper: institutions like insurance companies, pension funds, and family offices often cannot directly open exchange accounts but can allocate ETF shares within a compliant framework. Once liquidity is connected through the ETF pipeline, any announcement from Washington regarding interest rate decisions or U.S. Treasury auctions can be more directly reflected in ETF subscriptions and redemptions, which in turn reflects back to the spot and futures markets.
Stablecoins represent another, more "wild" waterway. A research report released by Japan's Financial Services Agency in 2025 mentioned that by the end of 2024, the total market value of global stablecoins first exceeded $200 billion and continued to expand in 2025, with USDT maintaining the largest share, followed closely by USDC and various new yield-bearing stablecoins. By the fall of 2025, TD Securities reported a figure of approximately $250 billion, a significant jump from $159 billion in the summer of 2024.
Even more interesting is the profitability. Morgan Stanley calculated in an analysis that Tether, the issuer of USDT, generated about $13.7 billion in net profit in 2024, with a total employee count of only about 150, equivalent to "over $90 million profit per person," relying on its massive reserve assets and short-term Treasury interest. In other words, stablecoins have transformed from merely "transporting dollars" into a high-profit, high-cash-flow shadow banking system.
For the crypto market, the supply of stablecoins is often viewed as a real-time thermometer of on-chain liquidity: a continuous increase in total supply indicates more funds are stationed on-chain waiting for opportunities; a contraction in total supply or a return to fiat currency often means some players are exiting. Over the past two years, the correlation between Bitcoin and the total market value of stablecoins has become increasingly tight, with large daily issuances or redemptions often triggering price fluctuations in Bitcoin and mainstream altcoins.
When looking at ETFs and stablecoins together, a clear structure emerges: macro liquidity determines the "water level," while ETFs and stablecoins direct the water to specific pools. For a period, the ETF subscription wave pulled traditional institutional funds into Bitcoin, amplifying volatility through exchanges and futures markets; at another time, the use of stablecoins in emerging market payments and over-the-counter settlements increased, causing on-chain funds to become more dispersed across various applications like DeFi and GameFi. Strong macro analysis must be interpreted alongside these pipelines to get closer to the true capital flow.

# 4. A "Liquidity Lazy Observation Method" for Newbies

If you've just entered the space for a few years, have a day job, and don't have time to watch the Federal Reserve meetings live, but still want to grasp some macro rhythm beyond emotions, you can try setting up a very simple observation table to condense the complex global liquidity into a few pages.
First, take a look at M2-like indicators. Many research institutions create public charts for global M2 or the "Global Liquidity Index," and newcomers don't need to worry about how each item is weighted; they just need to learn to recognize the big trends: is the overall curve rising, flat, or declining? When the trend is clearly upward, if there is a sudden crash or an irrational extreme panic day, you can be a bit more patient and reduce the impulse to chase panic selling; when the curve clearly peaks or even turns down, even if your friends are constantly talking about a "super cycle," you should leave a safety cushion for your positions.
Next, pay attention to the central bank agenda. By the fall of 2025, the Federal Reserve had ended its current round of quantitative tightening and lowered the federal funds target range to 3.75%-4.00%, with the market generally expecting further rate cuts. For risk assets, the significance lies not in a single 25 basis point adjustment, but in the shift from "tight" to "loose." Coupled with the respective fiscal stimulus plans of Europe, Japan, and China, Arthur Hayes proposed the view that "the flood of fiat currency liquidity has not truly receded," even directly giving a million-dollar Bitcoin forward target.
The third eye focuses on the "water meter" within the crypto circle: total market value of stablecoins, daily net inflows of mainstream spot ETFs, and open interest in contracts. These indicators usually have convenient aggregation websites, and the graphics are much friendlier than professional macro charts. For example, when the daily net inflow of U.S. spot ETFs turns positive quickly and continues for several days, it often accompanies Bitcoin rebounding from a temporary bottom; once there are consecutive large net outflows, you should pay attention to whether institutions are reducing positions at the trend peak.
The final dimension is for psychological reinforcement. Raoul Pal repeatedly reminds long-term holders in interviews: there are only two questions that really need to be answered—will the future world be more digital than today? Will the global liquidity cycle continue to expand to refinance trillions in government debt? If the answers to both questions are affirmative, short-term violent fluctuations may actually serve as a gift for building positions, rather than a destined nightmare.
By observing these aspects, newcomers may still not fully understand the professional meaning of each macro data point, but they can pull themselves out of the purely emotion-driven "buy high, sell low" mode. At least before leveraging, they should ask themselves one more question: Is this a phase where liquidity is climbing up, or is it starting to go down?

# 5. The Cycle Story is Being Rewritten: From "Halving Myth" to "Liquidity Script"

Over the past decade, many people have become accustomed to using Bitcoin's "four-year halving cycle" to find rhythm in the market: warming up a year before the halving, experiencing a main rise in the year after the halving, and then entering a long bear market. While this experience is useful, it increasingly struggles to explain the current situation on its own. Arthur Hayes and a group of macro investors have publicly proposed that what truly dominates each round of bull and bear markets is not the halving itself, but the position of macro liquidity at the time of the halving.
Looking back at historical major pullbacks, 2014, 2018, and 2022 corresponded to varying degrees of monetary tightening: either the end of interest rate hikes or accelerated balance sheet reductions. Conversely, the most vigorous rallies almost all occurred during easing cycles: the global "money printing rescue" after the pandemic directly pushed Bitcoin above $60,000; the current round of movements also began with multiple central banks expanding their balance sheets and nominal interest rates being lowered, but with geopolitical tensions and regulatory battles complicating the path.
For individual investors, the more realistic question is not to argue about whether "the halving has lost its effectiveness," but to adjust their narrative priorities. On-chain narratives remain important; L2 scaling, the Bitcoin ecosystem, restaking, and new public chains will influence capital flows at certain stages; however, at a higher level, the macro script determines how much imaginative space the market can allow. In years of abundant liquidity, the same story can support hundredfold tokens; in years of tightening liquidity, even the most attractive white papers cannot escape the fate of "being told to existing funds."
Returning to the question posed at the beginning of the article: why can a single announcement from Washington cause the price of the coins in your hands to turn sharply? The answer goes beyond just "institutions are too bad." The tug-of-war over the budget changed the TGA balance, the Federal Reserve adjusted the slope of its balance sheet, and global central banks are caught between debt and inflation, while ETFs and stablecoins direct macro funds onto the blockchain, amplifying every hesitation and greed in the K-line.
From the perspective of macro liquidity, Bitcoin is no longer just telling its story through halving; it is being used as a testing ground by the entire U.S. dollar system and global debt structure. Whether it is the budget battles in Washington or the fine-tuning of interest rates by European and Japanese central banks, it will ultimately be transmitted to on-chain assets through multiple pipelines such as ETFs, stablecoins, and exchanges. Institutions willing to continue digging in such an environment will transform themselves into true "docks" capable of accommodating incremental liquidity. CEEX is currently advancing its layout in the African market, inviting local developers and institutions to co-build a compliant business landscape, while also submitting an application for a Dubai VASP license in the Middle East, integrating the broker system and CMC mining into a broader regulatory framework, which, from a certain perspective, is equivalent to paving the way for the next cycle in advance.
For individual investors, what may be more meaningful is not to focus all their energy on the next halving date, but to learn to bridge the macro rhythm and platform choices. On the macro level, you can try to understand a few basic liquidity curves; on the micro level, try to choose exchanges that are willing to disclose rules and build systems around brokers and long-term incentives, such as CEEX, which designs equity mining around CMC and highlights broker entry and pathways in the new app, consciously tying platform revenue to user retention. When the next wave of directional changes from Washington or other capital centers suddenly occurs, you will have both a basic judgment on liquidity and relatively reliable infrastructure, and while the pain from volatility will still exist, it will no longer be completely incomprehensible. Macro liquidity can be seen as a slowly moving negative film, with prices being the photos etched on the film; the clearer the direction of the film, the weaker the impact of sudden plot twists.