BIT 투자 연구: 미국 부채가 40조 달러에 육박하는데, 자금이 왜 금과 비트코인을 주목하기 시작했을까?

The market is currently facing dual pressures from the continuous expansion of U.S. debt and rising U.S. Treasury yields. The total outstanding public debt of the U.S. federal government is approaching $40 trillion. Simultaneously, a large amount of debt is maturing and needs to be refinanced and rolled over at significantly higher interest rates. The recent rise in oil prices has further exacerbated this issue by adding inflationary pressure. Higher financing costs could increase government interest expenses, generating more borrowing and fiscal spending needs, thus worsening the debt growth trajectory.

Meanwhile, foreign demand for U.S. Treasuries is also undergoing changes. Japan may reduce its holdings of U.S. debt to support the rapidly depreciating Yen, while China continues to diversify its foreign exchange reserves, gradually decreasing its allocation to U.S. Treasuries and increasing its gold reserves. The continuous issuance of bonds by large-cap U.S. tech companies is also diverting market demand away from U.S. debt. With changes in foreign demand for Treasuries, rising debt refinancing pressure, and persistent inflation concerns, the risk of further upward movement in U.S. Treasury yields is increasing.

$40 Trillion Debt Combined with 5% Yields: Pressure on the Stock Market is Rising

The 10-year U.S. Treasury yield has rapidly risen from briefly falling below 4.0% before the outbreak of the US-Iran war to 4.70%, approaching recent highs. If it moves closer to 5.0%, the attractiveness of bonds to capital will significantly increase. Long-term investors, such as pension funds, can lock in nominal yields of around 5% by allocating to long-duration bonds without taking on the volatility risk of the stock market. Consequently, the risk of capital flowing from stocks to bonds and stock valuations coming under pressure will also rise.

Currently, the S&P 500 index remains in an upward trend, with the key trend model level at 7,363 points. The index's latest reading is 7,526 points. However, it has been in a consolidation phase over the past two months, and recent upward momentum has weakened. The smoothed moving average of the weekly RSI is still declining, and the period from August to September is typically a seasonally weaker phase. If the index retraces towards the 7,000 point level, the technical picture might form more favorable conditions for a reversal. With the U.S. midterm elections approaching in November, policy uncertainty may also prompt fund managers to increase their cash positions.

The pressure on tech stocks is even more pronounced. The Nasdaq index is currently trading below its 21-day moving average of 29,477 points and has broken down from its previous symmetrical triangle pattern. If it fails to reclaim this level and surpass the upper trendline, the risk of a further correction towards the 26,500 point level increases. One of the significant drivers of the prior tech stock rally was the massive investments and growth expectations of large-cap tech companies. However, this heavy capital expenditure has pushed the free cash flow of these companies into negative territory. Against the backdrop of a hawkish Fed stance and inflationary pressure spreading to more categories, the pressure on the stock market is intensifying.

From Stock Market Pressure to Asset Rotation: Gold and Bitcoin May Regain Capital Inflows

As U.S. debt continues to expand, the divergence between Bitcoin and the debt growth trend has widened to levels comparable to those seen during the 2022 Bitcoin bear market. One of Bitcoin's core founding principles is hedging against the risk of continuously expanding sovereign debt. Looking at the long-term trend, while U.S. government debt has been climbing, Bitcoin has generally moved in a similar direction, although it periodically becomes overvalued or undervalued relative to the debt growth trend.

Gold is also showing noteworthy technical signals. Its weekly RSI has fallen to levels that historically often precede strong rebounds. Concurrently, both Gold and Bitcoin are breaking upwards through their recent downward trendlines. If U.S. debt surpasses $40 trillion and the 10-year Treasury yield moves closer to 5.0%, stock market valuations and capital flow pressures could continue to increase. Gold and Bitcoin may benefit from rising investor demand for alternative assets and safe-haven allocations.

Overall, the market is currently forming a set of mutually reinforcing macro variables: U.S. government debt approaching $40 trillion, a massive amount of debt needing refinancing at high rates, potential further adjustments to U.S. debt allocations by major foreign holders like Japan and China, and the 10-year Treasury yield edging towards the critical 5.0% level. As Treasury yields rise, bonds become more attractive relative to stocks, putting greater capital and adjustment pressure on stocks, particularly tech stocks.

For investors, the key points to watch next are not just whether U.S. debt breaks through $40 trillion, but more importantly, whether the 10-year Treasury yield can continue to rise towards 5.0% and the resulting capital flow shifts. If the stock market faces further pressure, and Gold and Bitcoin sustain their breakout above the recent downward trendlines, capital may gradually rotate from stocks into Gold and Bitcoin, driving a new wave of cross-asset rotation.

Some of the perspectives above are from BIT on Target. Contact us to get the full BIT on Target report.

Disclaimer: The market carries risks, and investment requires caution. This content does not constitute investment advice. Digital asset trading may involve significant risk and instability. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. BIT is not responsible for any investment decisions made based on the information provided in this content.