Market Matters August 2025
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Jason Pagoulatos: [00:00:00] Good morning everybody, and welcome back to yet another Market Matters episode Today. Uh, we are joined by, uh, mainstay Kevin Kelly here, you know, [00:00:15] head of, uh, I don’t even know, I don’t even know what your title is anymore. Kevin, co-founder of Delphi. Um, whatever, whatever Delphi needs, whatever, yeah, whatever Delphi needs, right?

Uh, Marcus, uh, markets analyst and, [00:00:30] uh, LTR or Young Lung reus as some know you, uh, on chain, uh, data analyst here at, at Delphi. Uh, how’s everybody doing so far? How’s, uh, how’s August treating everybody now that we are about a week in markets? [00:00:45] Decided to, to take a tank and then start recovering pretty nicely in the last, uh, two or three days.

Good. Everybody’s all right. Hank hanging in there.

LTR: Hanging in there, man, than it

Kevin Kelly: was a few days [00:01:00] ago.

LTR: Yeah, that’s true. That’s true. I feel like there’s just like, there was a lot of front running, ’cause you know, last year, August 5th was, was not too kind to us. So thankfully this year, uh, so far it’s been pretty mooted.

Um, yeah,

Jason Pagoulatos: the PTSD from the Yen [00:01:15] Carry trade unwind was, uh, yeah, it was pretty brutal. Um,

LTR: with the, with the taco stuff though. You just never know, man, Mike, you just never know. It’s, don’t tell

Jason Pagoulatos: Trump about taco and we should be good.

Marcus Wu: Trump put a hundred percent tariff on, uh, semiconductors [00:01:30] yesterday and, and the market barely flu.

But I mean, today,

LTR: well he excluded Nvidia and uh, he excluded the big ones because they have US investments, which is kind of cool in a sense. ’cause it, you know, it’s gonna try and propagate more US investment from the [00:01:45] semiconductor company. So like I can see the, the thought process behind there. Uh, ’cause like Nvidia is a pretty US company.

Like, I, I don’t think they should take a hit for that, but, um. Yeah, it’s an interesting, interesting debate for sure.

Jason Pagoulatos: [00:02:00] Um, yeah, I mean yesterday, uh, there was like a, a slew of, of tariff related announcements. And, and to Marx’s point, like, and also I guess, you know, you know, LTR makes a good point. A lot of, you know, the big, the big boys who, who, you know, um, [00:02:15] or the major players in those spaces, a lot of those had had certain exemptions, but I was still actually decently surprised with, um, the way markets, I guess, lack of reaction, right?

And markets, markets effectively seemed to [00:02:30] kind of just be looking past a lot of these, um, these headlines. And they, and they’re starting to, you know, not react bearishly to headlines that aren’t, you know. On, on the surface, super bullish. Um, and it kind of like goes back to something that I [00:02:45] tweeted about.

Um, like two weeks ago I was like, kind like before we had this dump, I was a little bit like, um, like cautious. ’cause we had all these like, amazing headlines and, and price wasn’t reacting in the way that you would generally expect it to react to bullish headlines. And I was like, okay, [00:03:00] that’s typically a sign of, um, you know, momentum slowdown markets, maybe, uh, getting ready to take a breather and pull back a bit.

Um, and we, we saw that for, you know, like three or or four days, right? We, we kind of like sold off from like [00:03:15] one 18 down to like one 12 or one 11 or whatever it was. Um, and then over the last couple days we’ve, we’ve kind of seen like the reverse of that to, to an extent, which, um, I think Bulls should, should probably be happy of.

Right? We’ve, we’ve kind of [00:03:30] retraced a lot of the sell off. We’re, we’re kind of now back, um. Uh, at that, like, you know, that mini range low, like one 17 ish, 1 16, 1 17. And, um, if BTC can kind of, you know, continue doing decently well, I [00:03:45] think it, you know, sets, sets us up for maybe, um, a leg higher before, I mean, I was originally planning and before I think a lot of people were, but before we get into that, I think, I think it makes sense to maybe talk about some of, um, some of the macro stuff, [00:04:00] uh, on the, on the horizon specifically with, um, some of the fed liquidity facilities, the RRP, the TGA.

I know Marcus has been, um. Chatting with a lot of the pro members in the Delphi, uh, pro Telegram chat about some things he’s seeing and he is [00:04:15] working on, he’s actually in the middle of working on a, a macro liquidity report that kind of dives into a lot of these dynamics and, uh, I don’t wanna, you know, spill the beans too much, but maybe, maybe Marcus can kind of give us a little bit about what he’s looking at.

Kev maybe [00:04:30] opine on, on some of these dynamics because there’s a lot of interplay between, um, between a lot of the players, um, in this, in this area. So, yeah, why don’t you kind of give us a little primer on this, Marcus, and kind of like what you’re looking at, what you think the important takeaways might [00:04:45] be, and then everybody can, uh, get nice and excited for the report, which I think you’re planning on getting out sometime next week.

But I don’t wanna put too much pressure on you.

Marcus Wu: No worries. Uh, let me just start by saying this. I think the TGA is a net [00:05:00] QT for the, for the market. And, uh, where we stand right now is for

Jason Pagoulatos: those who don’t know or may not have read a lot of our stuff in the past, like, just generally, like what, what is the TGA for those who are?

Marcus Wu: TGA is the treasury general account. [00:05:15] So you can think of it like the, the balance, the checking account of the treasury. So they spend money from that account and, uh, when the account is out, they gotta refill it and they refill it by pulling liquidity out of, uh, different [00:05:30] areas. So this year is very different from the past, uh, times that they have pulled money back into the TGA mainly because, uh, you can think of it as liquidity strains on, on the, uh, on the, uh, current, um, setup.

Right now, [00:05:45] banks are not as liquid as they, they used to be. Uh, the RRP. Reverse repo facility is, is drained. So there’s not much there, there. The treasury has to find new ways to refill their account, and that is [00:06:00] what’s concerning for me because, um, the estimates of, um, the refill is gonna be onwards of like 500 billion.

So that liquidity has to come from somewhere. And, um, my view is that when the TGA starts [00:06:15] refilling, uh, we’re gonna start seeing liquidity being pulled. And, you know, crypto being the most, um, being the most risk on, uh, asset class would usually first be the place where liquidity gets pulled out. And, uh, and [00:06:30] if you assume Bitcoin is gonna be impacted, then your alt coins and, and everything else is gonna be more impacted.

Um, but in general, I just think that the timeline makes sense. Uh, estimates of the TJ starting to refill [00:06:45] is starting anywhere from. Now actually till end of the year. So we’re kind of like on a time crunch. Right. And um, and the other chart that I’ve been tracking is the, uh, net US liquidity. We’re [00:07:00] still in a big range.

Um, we haven’t broken up from our 2021 2022 highs. So I’m in my view personally that altcoins will not go on just crazy tear that everybody’s been hoping for until at least the TJ gets [00:07:15] completed. Uh, and that should coincide with hopefully a breakout of the overall net US liquidity into new highs in 2026.

Um, but that’s just a primer, uh, you know, stay tuned for the report. Um, I’m wondering if [00:07:30] Kev has anything to add here as well.

Kevin Kelly: Yeah, I think it’s, it’s definitely around the time to start raising that as a concern. Um, I think what’s different to what you alluded to, and I, I know that you’re gonna be hitting [00:07:45] on in the report is.

Compared to the last time we saw the debt ceiling raise right back in June of 23, um, that liquidity buffer with the RRP was really the kind of fundamental liquidity, positive liquidity driver, right? ’cause [00:08:00] it got drawn down almost 2 trillion, even though the US uh, treasury was issuing, you know, after that period issued upwards of 1.5 to 2 trillion in net debt over the following like 12 to 18 months.

Um, so the RRP [00:08:15] being where it is, is a concern. Uh, there are other ways or sources of liquidity for this incoming wave of treasury issuance that everybody at this point is expecting. In part because it’s shifting to the [00:08:30] short end of the curve, right? Versus the long end. So this is where you get into like bank balance sheets, which I know you’ve done a lot of work on, and, and we’ll hit on, um, money market funds as well, have certain excess reserves that they could shift away from where they’re currently invested in putting it into [00:08:45] T-bills.

So it’s a kind of a long longwinded way of saying, I think the TGA refill is a near term risk because if it plays out how we potentially think it will, likely, the RRP doesn’t get, maybe not entirely drained, [00:09:00] but that buffer probably comes from bank reserves, which as we’ve shown in a lot of research in the past.

Bank reserves really serves a form of really good form of liquidity, right? When you look at net fed net liquidity, like you mentioned, bank reserves are the kind of biggest [00:09:15] contributing factor to the fluctuations in that. And so when you chart year over year, or even just the three month changes in Bitcoin’s price versus US bank reserves, uh, it’s a very strong correlation.

So if you see bank reserve starting to get drained a bit, obviously that’s not the best liquidity support or [00:09:30] backdrop for Bitcoin. The only other thing I’ll say is the US is a very large component of global liquidity, but it

Delphi's Market Matters - August 2025

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