Bitcoin’s New BFF: Treasury T-Bills?!

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Bitcoin closely tracks shifts in U.S. T-bill issuance, more than M2 or Fed balance sheet changes.

For years, crypto investors have been relying on M2 and the Fed’s balance sheet like it’s a dating app-unreliable, but they keep swiping. Turns out, Bitcoin’s real crush is the Treasury’s T-bills. Who knew?

Bitcoin Tracks T-Bill Issuance With +0.80 Correlation, Outpacing M2 and QE

Analyst Axel Bitblaze, who’s probably more familiar with Bitcoin than his own family, points out that T-bill issuance has a stronger link to Bitcoin than your mom’s “I’m fine” when you ask how her day was. Over the past four years, T-bills have been Bitcoin’s BFF, with a +0.80 correlation. That’s like a 95% match in a dating app-except this one doesn’t end in a “message failed” error.

This chart is worth watching next time..

Not M2 supply, not the fed balance sheet. as we’ve already seen M2 decouple.

there were periods where M2 was flat or even up and didn’t care..

same with the fed balance sheet. correlation here is basically zero at -0.07.

the chart…

– Axel Bitblaze 🪓 (@Axel_bitblaze69)

In comparison, Fed liquidity facilities recorded +0.54, while the global liquidity index came in at +0.26. Fed balance sheet activity, including QE and QT, showed almost no relationship at -0.07. That’s like being the last person at a party and still getting a “you’re not invited” text.

BTC rallied strongly in 2023 and 2024 even as the Fed reduced its balance sheet. So, the Fed’s like, “We’re tightening!” and Bitcoin’s like, “I’m fine, I’m fine.”

In late 2021, T-bill issuance peaked around the same time Bitcoin reached its all-time high. Issuance then declined throughout 2022. Several months later, BTC entered a deep bear market. It’s like a bad relationship where one party keeps changing their mind.

Mid-2023 marked a bottom in issuance, which aligned with the start of the OG coin’s recovery. Issuance rose during 2024 and 2025, and Bitcoin followed with another rally after a delay. Late 2024 showed another peak in issuance. It’s like Bitcoin’s waiting for a signal, and T-bills are just the noisy neighbor shouting “I’m here!”

By early 2026, issuance began to decline again, while Bitcoin showed renewed weakness. The repeated pattern suggests that Bitcoin often lags changes in short-term Treasury supply. Because nothing says “I’m confused” like a cryptocurrency following a government bond auction.

Treasury Issuance Signals Growing Influence on Crypto Markets

T-bill issuance has a more direct impact on market liquidity than broader money measures. When the Treasury increases short-term bill supply, capital often moves into money market funds. Like, “Hey, let’s all put our money in a fund that’s basically a piggy bank with a ‘I’m not a bank’ sign.”

Cash also shifts through the reverse repo facility, changing short-term funding conditions. Risk assets, including Bitcoin, tend to respond to changes in liquidity. Because nothing says “I’m a risk-taker” like a cryptocurrency reacting to a government bond sale.

M2 moves more slowly and reflects overall money supply, not short-term funding stress. Fed balance sheet data tracks asset purchases and roll-offs, but it does not always capture fast liquidity shifts. In several periods, M2 remained flat or even increased while Bitcoin struggled. A similar disconnect appeared between QE cycles and Bitcoin’s price action. Because sometimes, the Fed’s like, “We’re doing everything right,” and Bitcoin’s like, “Yeah, but why are you buying so many bonds?”

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2026-02-21 08:08