Jerome Powell

Chair

Drops

Reserve

<p>“The Big Short” legend <a href="https://x.com/michaeljburry/status/1998898103974334649" target="_blank" rel="noopener noreferrer nofollow">Michael Burry</a> has issued a dire warning as the U.S. Federal Reserve prepares to <a href="https://coinpedia.org/price-analysis/bitcoin-price-aims-for-99k-as-fed-initiates-25-bps-rate-cut-amid-onset-of-qe/" target="_blank" rel="noopener noreferrer nofollow">buy $40 billion in Treasury bills within 30 days</a>. While the Fed insists this isn’t quantitative easing (QE), Burry argues the move signals a deep liquidity strain in the banking system, one that could spill over into the broader economy and the <a href="https://markets.coinpedia.org/" target="_blank" rel="noopener noreferrer nofollow">crypto markets</a>.</p>
<h2 class="wp-block-heading" id="h-a-fragile-banking-system-behind-the-fed-s-40b-t-bill-push"><strong>A Fragile Banking System Behind the Fed’s $40B T-Bill Push</strong></h2>
<p>Fed Chair Jerome Powell disclosed that these purchases are part of “Reserve Management,” but Burry isn’t convinced. He calls it a masked rescue mission for a banking sector still rattled by the 2023 mini-banking crisis. Burry highlights that bank reserves, once at $2.2 trillion pre-crisis, now hover above $3 trillion, yet banks are still showing cracks.</p>
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
 <p><strong>“If the U.S. banking system can’t function without $3+ trillion of life support, that’s fragility, not strength,” Burry warned, adding that each crisis forces the Fed to permanently expand its balance sheet.</strong></p>
</blockquote>
<h3 class="wp-block-heading" id="h-liquidity-is-quietly-returning"><strong>Liquidity Is Quietly Returning</strong></h3>
<p>Crypto analyst <a href="https://x.com/TheCryptoLark/status/1998841672214474886?s=20" target="_blank" rel="noopener noreferrer nofollow">Lark Davis</a> echoed concerns but focused on what it means for the crypto market. He says the Fed’s T-bill purchases inject liquidity directly into the system: “The money printer is warming up.” He calls this the start of a “stealth QE”, hinting that markets could soon feel the boost.</p>
<p>Meanwhile, <a href="https://x.com/AshCrypto/status/1999007311453642779?s=20" target="_blank" rel="noopener noreferrer nofollow">Ash Crypto</a> pointed out a major disconnect:</p>
<p>He highlighted a sharp contrast between traditional markets and Bitcoin. Despite the FOMC announcing three rate cuts for 2025, gold and silver hitting new all-time highs, a $40B Treasury-bill buying spree, gradual QE, and U.S. stocks sitting less than 1% below their ATH, Bitcoin remains 28% below its all-time high. With everything else rallying, he questions whether this gap hints at market manipulation.</p>
<h3 class="wp-block-heading" id="h-bitcoin-drops-below-90k-as-miners-sell"><strong>Bitcoin Drops Below $90K as Miners Sell</strong></h3>
<p>Bitcoin slid over 2%, dropping to $90,252 ahead of options expiry. Analysts like Ted Pillows warn BTC could revisit $85,000, noting its failure to reclaim the $93K–$94K resistance. Support sits in the $88K–$89K zone. Adding pressure, miners are offloading holdings, Marathon Digital dumped 275 BTC worth $25.3 million, according to Lookonchain.</p>
<p>The selling comes as repo market volatility rises, with expectations that the Fed may need even more aggressive liquidity measures to prevent a year-end funding crunch, a scenario Burry sees as further proof of systemic weakness.</p>
<h2 class="wp-block-heading" id="h-faqs">FAQs</h2>
<div class="schema-faq wp-block-yoast-faq-block">
 <div class="schema-faq-section" id="faq-question-1765452373596">
  <strong><strong>Why is Bitcoin lagging while gold and stocks hit new highs?</strong></strong>
  <p>Bitcoin remains 28% below its peak due to miner selling, weak liquidity, and fear in the market despite strong macro signals.</p>
 </div>
 <div class="schema-faq-section" id="faq-question-1765452383919">
  <strong><strong>How could the repo market volatility affect Bitcoin?</strong></strong>
  <p>Rising repo stress suggests liquidity issues. If it worsens, risk assets like Bitcoin may face more downside before recovering.</p>
 </div>
 <div class="schema-faq-section" id="faq-question-1765452394841">
  <strong><strong>Will miners selling Bitcoin push the price lower?</strong></strong>
  <p>Yes. Heavy miner selling adds supply pressure. If demand stays weak, Bitcoin may retest support near the $85K–$88K range.</p>
 </div>
</div>

Michael Burry Warns of Trouble as FED Starts $40B T-Bill Buying

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