According to @DowdEdward, market consensus admits an AI-driven equity bubble but believes it is still early, indicating continued participation despite frothy conditions (source: Edward Dowd on X, Oct 20, 2025). He adds that some participants expect to pass risk to marginal late buyers, highlighting a classic greater-fool dynamic in late-cycle behavior (source: Edward Dowd on X, Oct 20, 2025). Dowd warns markets may be nearing a “record margin debt” phase, signaling elevated leverage risk and vulnerability to abrupt de-risking (source: Edward Dowd on X, Oct 20, 2025). Based on Dowd’s caution, traders can tighten risk limits in AI-led equities and leveraged beta, and crypto participants can treat equity-leverage spikes as a potential volatility catalyst across risk assets while monitoring official margin-debt prints for confirmation before adjusting exposure (source: Edward Dowd on X, Oct 20, 2025).

According to @KobeissiLetter, US margin debt rose by 67 billion dollars in September 2025 to a record 1.13 trillion dollars, highlighting a rapid build-up in investor leverage, source: The Kobeissi Letter on X, Oct 17, 2025. @KobeissiLetter also reports that 5x leveraged ETFs have been proposed to the US SEC, a development that would materially increase accessible leverage in public markets if approved, source: The Kobeissi Letter on X, Oct 17, 2025. Leverage and margin calls are documented to amplify price swings and forced selling during stress, which heightens tail risk when aggregate margin debt is elevated, source: Federal Reserve Financial Stability Report, Nov 2023. For crypto, correlations between BTC and ETH and equities have strengthened in recent years, raising spillover risk from equity deleveraging into digital assets during volatility spikes, source: IMF Global Financial Stability Note, Jan 2022. Trading takeaways: reduce net and gross leverage, monitor equity volatility and liquidity conditions, and watch for deleveraging waves that can transmit to BTC and ETH via cross-asset risk channels, source: Federal Reserve Financial Stability Report, Nov 2023; IMF Global Financial Stability Note, Jan 2022.

According to The Kobeissi Letter, margin debt soared by 9.4% in June, reaching a historic high of $1.01 trillion. This marks the largest monthly increase ever recorded, up by $87 billion, with a staggering $400 billion surge over the past two years. Such elevated leverage in traditional markets signals heightened risk appetite and potential for increased volatility, which may correlate with amplified swings in the cryptocurrency market as traders seek higher returns or face margin calls. Source: The Kobeissi Letter.