Treasury Drains $77 Billion from Bank Reserves Ahead of Crucial Funding Test

The US Treasury is quietly draining $77.579 billion from bank reserves in a move that will test Bitcoin's liquidity setup on August 5.

This comes as the Treasury General Account rose by $81.153 billion, with the weekly-average bank reserve balances falling to $2.984570 trillion for the week ended July 29, down from $3.062149 trillion for the week ended July 22.

The Treasury's Q3 borrowing estimate has been raised by $68 billion, but the actual financing details and post-settlement reserves will show whether pressure reaches broader risk appetite.

In remarks on July 9, SOMA Manager Roberto Perli warned that heavy net bill issuance in July and August could tighten money markets. The New York Fed's overnight reverse-repo operation accepted $2.127 billion from four counterparties last week, with the broader reverse-repo average at $343.947 billion for the week ended July 29.