The Fed's liquidity buffer is gone. Reverse Repo Balances collapsed from over $2 trillion at the peak to practically zero. In 2023, the RRP was full enough to cushion the TGA refill by absorbing Treasury issuance instead of draining bank reserves. With the RRP now at the floor, that buffer no longer exists. Any future Treasury issuance or TGA rebuild has to come directly out of bank reserves. The Fed is left with two options: let reserves drift lower and risk another repo spike or expand the balance sheet to provide liquidity directly. Given how badly 2019 went, the second path is far more likely. That would mean the Fed shifts from draining liquidity to adding it back to the market, a meaningful pivot from the past two years. Combined with QT ending and the TGA set to draw down, marginal liquidity is turning net positive for the first time since early 2022. A key headwind for crypto could be fading.(Delphi Digital)