Tax Deadline Tests Bitcoin Liquidity Ahead of Fed Meeting
The US tax deadline on September 15 may put Bitcoin liquidity to the test as it coincides with the Federal Reserve's meeting. Bank reserves, which support payments and funding, have seen an improvement in recent days.
Tax payments from individuals and corporations will move cash from commercial banks' reserve accounts into the Treasury's account at the Fed. This shift can tighten dollar funding and limit risk-taking before policymakers conclude their September 15-16 meeting.
The Federal Reserve's balance-sheet release showed weekly-average bank reserves rose $96.779 billion to about $2.991 trillion in the week ended September 9. However, the Treasury General Account fell $84.6 billion to $883.3 billion on a weekly-average basis.
Several forces can cushion this transfer, including Treasury spending and Fed tools such as the Standing Repo Facility, which supplies eligible institutions with temporary cash against securities to limit upward funding pressure.