Bitcoin Set for Massive Surge as Bank Reserves Near 'Danger Zone,' Says Adam Livingston
Author Adam Livingston suggests Bitcoin may surge as bank reserves at the Fed approach a critical scarcity threshold.Summary
Author and commentator Adam Livingston argues that Bitcoin is poised for a significant rally based on falling bank reserves at the Federal Reserve, which recently dropped to about $2.93 trillion, according to The Kobeissi Letter. Livingston views this level as approaching a "danger threshold" where liquidity scarcity begins to impact market functioning. He attributes this cash squeeze to three simultaneous factors: the U.S. Treasury rebuilding its cash balance, the Fed's ongoing quantitative tightening (QT), and the growth of other Fed liabilities like physical currency. Historically, Livingston notes that when liquidity tightens to this point, policymakers tend to slow balance-sheet runoff, which has previously coincided with strong Bitcoin performance (e.g., 2019, 2020, 2023). Furthermore, he believes steady demand from spot Bitcoin ETFs reduces the readily tradable supply, meaning that any shift toward easing liquidity from this tight starting point could amplify upside moves for Bitcoin.
(Source：CoinDesk)