The US Treasury's actions have led to stagnation in the Bitcoin price, according to Raoul Pal.
Raoul Pal, founder of the analytical company Global Macro Investor and co-founder of the media platform Real Vision, explained why the price of Bitcoin is moving sideways and has stopped following the increase in the global money supply (M2).
Historically, Bitcoin has demonstrated a strong correlation with M2, a metric that reflects the amount of money in the economy, including cash and bank deposits, Raoul Pal stated. For example, when there's more money in the economy, investors are more likely to invest in cryptocurrencies, which supports the growth of digital assets. This correlation, the expert explains, is evident in over 89% of Bitcoin's price movements.
However, in the summer of 2025, this pattern was disrupted. The US Treasury issued $500 billion in government bonds at once, accumulating over $800 billion in its Treasury General Account (TGA). The regulator's financial intervention reduced available liquidity in the economy, limiting capital inflows into risky assets like Bitcoin. As a result, despite continued growth in M2 and investor expectations, the Bitcoin price did not rise but began to fluctuate sideways.
“This is not a glitch in the classic model, but a temporary distortion of the BTC price movement due to a sharp jump in the TGA balance,” Pal said in a comment to CoinDesk.
He emphasized that the Treasury's liquidity withdrawal has put pressure on cryptocurrencies, but as the TGA balance normalizes, Bitcoin will likely resume growth, following the growth of the global money supply.
The expert noted that other factors, such as sales by long-term Bitcoin holders, could also have exacerbated the flagship cryptocurrency's stagnation, but the main reason is the actions of the US Treasury Department.
Pal also suggested a strategy for beginning investors willing to invest less than $1,000 to help mitigate market fluctuations. He urged them to monitor macroeconomic indicators, such as the Ministry of Finance's policies, to better understand crypto market dynamics.
Source: cryptonews.net
