Bitrabo Editorial
Crypto experts have drawn a parallel between the actions of the US Treasury Department and those of Binance during Q1 2023 when the exchange allegedly sold $1 billion of the Industry Recovery Fund. During that period, there were suspicions of Binance artificially propping up liquidity in the crypto market. Allegations of potential market manipulation gained more traction when Binance CEO Changpeng Zhao converted $1 billion worth of Binance USD (BUSD) to Bitcoin (BTC), Ethereum (ETH), and Binance Coin (BNB), initiating buying pressure that led to the surge of Bitcoin, Ethereum, and BNB prices.
The decision to convert the $1 billion Industry Recovery Fund raised allegations of a possible injection of liquidity into the crypto market by Binance during a crisis period affecting crypto-supportive institutions like Silicon Valley Bank (SVB), which caused USDC to briefly de-peg.
There has been no definite link between Binance’s move and market manipulation, but investigators are now looking at the rapidly decreasing US Treasury General Account (TGA) balance.
Crypto analysts are watching the TGA, the bank account through which the US government manages its national debt and pays treasury yields, during a period when banks are under pressure. The Treasury has reportedly been propping up liquidity in the US economy, similar to what Binance allegedly did in Q1 2023. The balance of the account, which held approximately $1 trillion in 2022, has sharply decreased, with the balance now standing at about $38 billion, because the Treasury needs to keep the government running.
Treasury Secretary Janet Yellen warned of a possible default in June, stating that without congressional action to suspend or raise the $31.4 trillion debt ceiling, the government would default. She recently wrote to Congress, highlighting the gravity of the situation and the importance of action, and urged policymakers to raise the debt ceiling. If the ceiling is raised, the government will issue bonds, pressurize Bitcoin prices, and raise yields.
– Feature Image From Canva, Chart From TradingView