BIT 投研：美债逼近40万亿美元，资金为何开始盯上黄金和比特币？

The market is currently under dual pressure from the expanding U.S. debt scale and rising Treasury yields. The total outstanding public debt of the U.S. federal government is approaching $40 trillion. At the same time, 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 exacerbated this inflationary pressure. Higher financing costs could increase government interest payments and spur further borrowing and fiscal spending, worsening the debt growth trajectory.

Meanwhile, foreign demand for U.S. Treasuries is also undergoing changes. Japan may be selling U.S. Treasuries to support its rapidly depreciating yen, while China continues to diversify its foreign exchange reserves, gradually reducing its holdings of U.S. debt and increasing gold reserves. The continuous bond issuance by large-cap U.S. tech companies is also diverting market demand away from Treasuries. As foreign demand for Treasuries shifts, debt refinancing pressure rises, and inflation concerns persist, the risk of further increases in U.S. Treasury yields is growing.

$40 Trillion Debt Plus 5% Yield: Pressure Mounts on the Stock Market

The 10-year U.S. Treasury yield has risen sharply from below 4.0% before the outbreak of the U.S.-Iran war to 4.70%, approaching recent highs. If it moves closer to 5.0%, bonds will become significantly more attractive to capital. Long-term investors like pension funds can lock in a nominal yield of around 5% by allocating to long-duration bonds without bearing the volatility risk of the stock market. Consequently, the risk of capital flowing from stocks to bonds and weighing on stock valuations will also increase.

The S&P 500 index is currently in an uptrend, with a key trend model level at 7,363 points. The latest index reading is 7,526 points. However, it has been trading sideways over the past two months, and recent upward momentum has weakened. The smoothed moving average of the weekly RSI is still declining. Additionally, August to September is typically a seasonally weaker period. A pullback to around 7,000 points might create more favorable technical conditions for a reversal. With the U.S. midterm elections approaching in November, policy uncertainty may also prompt fund managers to increase cash positions.

Tech stocks are facing more pronounced pressure. The Nasdaq index is currently trading below its 21-day moving average of 29,477 points and has broken down from a previous symmetrical triangle pattern. If it fails to re-enter this range and reclaim the upper boundary, the risk of a further decline towards 26,500 points increases. One of the major drivers of the tech rally was the significant investment and growth expectations from large-cap tech companies. However, massive capital expenditures have pushed their free cash flow into negative territory. Against the backdrop of a hawkish Fed and inflationary pressures spreading to more categories, the pressure on the stock market is increasing.

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

As the U.S. debt scale 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 the core original purposes of Bitcoin was to hedge against the risk of ever-expanding sovereign debt. Looking at the long-term trend, as U.S. government debt continues to climb, Bitcoin has generally moved in a similar direction, though it has at different times been overvalued or undervalued relative to the debt growth trend.

Gold is also showing notable technical signals. Its weekly RSI has fallen to levels that historically often precede strong rebounds. Concurrently, both gold and Bitcoin are breaking above their recent downward trendlines. If U.S. debt breaks through $40 trillion and the 10-year Treasury yield inches closer to 5.0%, the valuation and capital flow pressure on the stock market may continue to intensify. In contrast, gold and Bitcoin could benefit from increased investor demand for alternative and safe-haven assets.

Overall, the market is currently forming a set of mutually reinforcing macro variables: U.S. government debt approaching $40 trillion, a large amount of debt facing high-interest-rate refinancing, potential further adjustments to Treasury holdings by foreign holders like Japan and China, and the 10-year Treasury yield nearing the key 5.0% level. As Treasury yields rise, bonds become more attractive relative to stocks, putting stocks, especially tech stocks, under greater capital and adjustment pressure.

For investors, the key focus ahead is not just whether U.S. debt will exceed $40 trillion, but more importantly, whether the 10-year Treasury yield can continue its ascent towards 5.0% and the resultant capital flow shifts. If the stock market comes under further pressure, while gold and Bitcoin sustain their breakout above recent downward trendlines, capital may gradually rotate from stocks towards gold and Bitcoin, driving a new round of cross-asset rotation.

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

Disclaimer: Markets are risky, and investment requires caution. This article 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 herein.