Media outlet says BTC could face liquidity strain even without more Fed rate hikes

Bitcoin could face a liquidity squeeze even if the U.S. Federal Reserve does not raise rates further, CryptoSlate said in an analysis. Citing research released by the Federal Reserve Bank of New York on Nov. 12, local time, the outlet said liquidity stress in the U.S. banking sector reached its highest level since 2014 as of the second quarter. It cited declines in banks’ liquid assets and a broader reliance on unstable funding structures as the main drivers. CryptoSlate added that if banks scale back lending, financial intermediaries could have less capacity to invest in risk assets, potentially transmitting liquidity pressure to Bitcoin. It added the assessment outlined a potential transmission path and did not mean an actual funding squeeze in BTC had already occurred.