According to The Kobeissi Letter, the Bank of Japan currently holds 52% of all domestic government bonds, vastly outpacing holdings by life insurers (13.4%), banks (9.8%), and pension funds (8.9%). Bloomberg reports the Japanese government’s debt has reached $7.8 trillion. This unprecedented concentration of government bond ownership by a central bank signals ongoing aggressive monetary policy, raising concerns about yen stability and potential spillovers into the cryptocurrency market. Traders should monitor for increased volatility in JPY pairs and risk-on assets like Bitcoin, as shifts in Japanese monetary policy or bond yields could drive capital flows into crypto markets. Source: The Kobeissi Letter on Twitter, Bloomberg.

According to Bloomberg (@business), several prominent hedge funds, including Michael Burry’s Scion Asset Management, have disclosed significant short positions against US Treasuries, citing rising interest rates and inflationary pressures (source: Bloomberg, June 2024). This bearish sentiment towards government bonds is fueled by expectations of continued Federal Reserve tightening, which historically leads to bond price declines and higher yields. For crypto traders, these macro trends may drive increased volatility in Bitcoin and Ethereum, as institutional investors seek alternative assets during bond market stress (source: CoinDesk, June 2024). Traders should monitor Treasury yields and Fed policy announcements closely, as shifts in bond markets can trigger capital flows into or out of digital assets.

According to The Kobeissi Letter, when comparing the US government to a public company, investors typically prefer a debt-to-asset ratio of 0.3x to 0.6x, implying debt levels should be around half of total assets. This ratio is crucial for assessing financial stability and investment attractiveness. The US government's current financial metrics significantly deviate from these norms, indicating potentially higher risk levels that could affect investor confidence and market dynamics. Such financial conditions may influence trading strategies, particularly in government bonds and related securities.

According to The Kobeissi Letter, the US Pentagon's audit in 2018 cost $1 billion, marking it as the most expensive audit ever. Adjusted to 2024, these costs are estimated at $1.5 billion. This financial inefficiency may affect defense-related stocks and government bonds due to increased scrutiny and potential budget reallocations.

According to Michaël van de Poppe, government bond yields have hit new lows, and the $DXY index is starting to turn. In the cryptocurrency market, $ETH is experiencing an upward trend, while $ONDO has announced the tokenization of ETFs, which could lead to increased trading volumes and interest in tokenized securities. Traders might consider maintaining their positions given these developments. Source: Michaël van de Poppe on Twitter.

According to The Kobeissi Letter, the US deficit reached $1.8 trillion in 2024, accounting for 6.4% of GDP. This has led to over $1 trillion per year on interest expenses alone. The need to finance this debt is primarily addressed through the sale of US government bonds, making it crucial for traders to monitor bond market dynamics as interest rates and bond demand will influence trading strategies.

According to The Kobeissi Letter, the US deficit has reached $1.8 trillion in 2024, equating to 6.4% of GDP. This substantial deficit results in over $1 trillion per year in interest expenses, creating a significant demand for US government bonds. Traders should note the implications for bond yields and market liquidity as this debt requires continued purchasing.

According to CryptoMichNL, as government bond yields continue to rise, Bitcoin is currently in a consolidation phase. The analyst predicts that Bitcoin might reach $65,000 before it begins its upward movement.