Bitcoin could face a cash squeeze without another Fed rate hike

A New York Fed study published Nov. 12 puts modeled US bank liquidity stress at a level last seen in 2014, highlighting a funding vulnerability that could curb Bitcoin risk-taking even without another Fed hike. The research update uses bank holding company data through the second quarter of 2026. Its liquidity stress ratio remained moderate by historical standards, at slightly above half its third-quarter 2007 peak. The ratio compares liabilities weighted for their likelihood of withdrawal, plus off-balance-sheet exposures, with assets weighted for liquidity. Its rise since early 2022 reflects a decline in liquid assets alongside more unstable funding and off-balance-sheet exposures. That leaves banks more exposed if funding becomes harder to retain. A separate capital measure tests a repeat of the 2022 rate shock.

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