In a groundbreaking development that could significantly impact Bitcoin’s trajectory, US Treasury Secretary Scott Bessent has announced an imminent overhaul of banks’ supplementary leverage ratio (SLR). This regulatory shift could unleash $250 billion in capital and potentially drive Bitcoin to new heights, as traditional finance barriers continue to crumble.
Understanding the $250 Billion Catalyst
The proposed SLR modification represents a seismic shift in banking regulation. By exempting US Treasuries from capital requirements, banks would free up approximately $250 billion in tier-one capital—a liquidity injection that dwarfs the Federal Reserve’s current monthly quantitative tightening pace of $5 billion. This development aligns with recent discussions about Bitcoin’s role in monetary policy, as highlighted in Senator Lummis’s recent proposal on Bitcoin’s potential to reduce US debt by 50%.
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Market Impact and Bitcoin’s Response
The market has already begun pricing in this regulatory shift, with benchmark ten-year yields dropping below 3.95%. Market analyst Furkan Yildirim suggests this could trigger a significant Bitcoin rally, as recent technical analysis indicates Bitcoin is eyeing the $115K level. The correlation between Treasury yields and Bitcoin’s price movement has become increasingly pronounced, with every basis point drop potentially benefiting crypto markets.
On-Chain Metrics Signal Strength
Supporting the bullish outlook, on-chain data reveals OTC desk inventories have declined to 115,000 BTC, suggesting increased institutional accumulation. This trend mirrors patterns seen during previous bull runs and could amplify upward price movements as supply tightens.
FAQ Section
How will the SLR change affect Bitcoin price?
The regulatory change could increase institutional liquidity flowing into risk assets like Bitcoin, potentially driving prices higher as yields become less attractive.
When will the SLR changes take effect?
While exact timing remains unconfirmed, Treasury Secretary Bessent indicated regulators are “very close to moving” on the rule change.
What’s the potential price target for Bitcoin?
Given current market dynamics and the scale of potential capital liberation ($250B), analysts suggest Bitcoin could target the $115K-$120K range in the near term.
At press time, Bitcoin trades at $108,790, maintaining strong support above the crucial $100K psychological level.
