The 40-day US government shutdown has just come to an end, and the "water tap" on Wall Street is about to be turned back on.

What did this record-breaking political tug-of-war do? It drained over a trillion dollars of liquidity from the crypto markets. Is that exaggerated? Assets that are extremely sensitive to liquidity, like Bitcoin, were forced to drop from a historic high of $126,000 to below $100,000. Behind the market's intense volatility is actually a liquidity squeeze.

Why is the shutdown so damaging? The key lies in the US Treasury General Account (TGA). During the shutdown, this account played a game of "inflows only"—in just three months, the balance skyrocketed from $300 billion to over $1 trillion. In other words, the market was forcibly drained of $700 billion in liquidity.

What does that compare to? It’s equivalent to the tightening effect of several consecutive Federal Reserve rate hikes. As a result, the secured overnight financing rate (SOFR) broke through the Fed’s policy rate ceiling, and bank reserves fell to their lowest since early 2021. The entire financial market is gasping.

Bitcoin, of course, can feel this. As the most sensitive asset to liquidity changes, it directly dropped about 20% from its early October high during the shutdown, even briefly falling below $100,000. On-chain data is even more straightforward—long-term holders started net selling during this period.

But now, the situation is changing. As the government restarts, the trillions of dollars frozen in the TGA are about to flow back into the market, creating a liquidity tide similar to short-term quantitative easing. For Bitcoin investors, this is not just about resolving a political crisis; it could very well be a market inflection point.