According to Woofun AI, the US Treasury's upcoming 2020 billion dollar bond coupon settlement on September 30 is becoming the focus of market attention. This large-scale capital flow not only tests the overnight financing situation at the end of the quarter, but is also likely to indirectly affect the Bitcoin market through interest rate fluctuations, causing investors to be wary of unexpected price fluctuations.
Judging from the specific structure of debt issuance, this settlement involves several types of critical periods. The US Treasury arranges to re-issue 10-year inflation-protected bonds, 2-year bonds, 5-year bonds, and 7-year bonds, all scheduled to be traded on the same day. Among them, the public face value of each variety was set at US$19 billion, US$69 billion, US$70 billion, and US$44 billion, respectively, for a total scale of US$2020 billion.
Meanwhile, $143.58 billion of publicly held interest-bearing bonds will expire on the same day, resulting in a net face value of $58.42 billion. It is worth noting that this net increase only reflects the number of securities that still need to be issued after maturity, and is not directly equivalent to actual cash outflow or reduction in bank reserves. The final actual cash flow situation will also be affected by multiple factors such as the auction price, inflation adjustment factors, and the expenditure pace of the Ministry of Finance.
Additionally, bonds auctioned before the end of the quarter are scheduled to be settled on October 1, so they are not included in the coupon settlement amount mentioned above.
In the face of potential liquidity pressure, the central bank's coping strategy and interest rate status have become key indicators for observation. The Federal Home Loans Bank of New York plans to execute approximately $15.6 billion in reinvestment purchases between September 15 and October 14, but has explicitly suspended operations dedicated to managing bank reserves.
This means that the Federal Reserve is still using treasury notes to replace the principal amount of maturing mortgage securities, rather than actively increasing reserves. Roberto Perley of the Federal Home Loans Bank of New York emphasized on September 22 that the current bank reserves are sufficient and the financing market remains orderly. As a comprehensive measure of overnight borrowing costs supported by treasury bonds, SOFR recorded 3.88% on September 24.
According to data compiled by Woofun AI, the SOFR for September 18 and September 21 was 3.85%, which is always below the 3.90% interest rate level paid by the Federal Reserve for bank reserves. Despite the upward trend in SOFR, the agency believes that market financing is stable. If SOFR rises only briefly at the end of the quarter and then falls rapidly, its signal strength will be weaker than the pressure situation where it continues to be above reserve interest rates.
In verifying the transmission mechanism of the Bitcoin market, traders are closely monitoring whether the financing situation of perpetual contract futures has deteriorated and whether the premium level in the futures market has narrowed. The deep decline in the market, reduced leverage ratio, and weak spot prices can be supporting indicators. A recent CryptoSlate report indicated that the decrease in the size of derivatives positions before settlement was mainly due to changes in US Treasury bond yields, not due to repurchase operations. If the repurchase rate and Bitcoin financing conditions remain stable after settlement, there is no evidence to support the expected transmission effect. Even if there is a situation where the decline in the price of Bitcoin goes hand in hand with the rise in SOFR, it is impossible to determine that there is a causal relationship between the two based on the coincidence of time points alone. Rational research needs to exclude other interfering variables.