According to @KobeissiLetter, foreign official US Treasuries held in Federal Reserve custody fell to $2.78 trillion in October, the lowest level since 2012 (source: @KobeissiLetter). Foreign official holdings in Fed custody have decreased by $166 billion since March and are down $356 billion from the 2021 peak, indicating weakening foreign demand for US debt and increased diversification away from US Dollar assets (source: @KobeissiLetter). Gold has been a key beneficiary of this rotation, consistent with reserve managers diversifying away from US debt (source: @KobeissiLetter). Traders should monitor US Treasury yield moves and gold flows for positioning as this decline in official custody holdings underscores softer marginal demand for Treasuries and shifting reserve preferences (source: @KobeissiLetter).

According to Paolo Ardoino (@paoloardoino), USDt is contributing to stable demand for US Treasuries, as reported on Twitter on May 7, 2025. This ongoing demand highlights the growing integration between stablecoins and traditional financial markets, supporting Treasury liquidity and potentially influencing yield volatility. Crypto traders should monitor this trend, as increased Treasury involvement by stablecoin issuers like Tether may affect both stablecoin supply dynamics and broader risk sentiment in the crypto market. Source: Paolo Ardoino Twitter.