Bitunix Analyst: The Ministry of Finance interferes with long-term debt, the Federal Trade Union will still prevent inflation, and BTC has risen strongly by nearly 20%
Comparing news, the US Treasury continues to stabilize the bond market by expanding long-term US bond repurchases. Treasury Secretary Bezent also stated that the size of a single repurchase may exceed 4 billion US dollars, indicating that the government's sensitivity to long-term financing costs is increasing. However, the judgment of the Board's officials on inflation did not simultaneously shift to easing. Daley believes that no evidence of an early interest rate hike is needed, but Mussalem believes that raising interest rates early may help avoid more aggressive policy tightening in the future. The Ministry of Finance wants to reduce long-term yield, and the Federal Reserve must prevent excessive easing of financial conditions. The policy tension between the two is rising.
What is more noteworthy is that the decline in interest rates brought about by the repurchase of US bonds did not continue, and the long-term yield soon rose again, reflecting that the real deal in the market was still 40 trillion US dollars of debt, about 6% fiscal deficit, huge government financing requirements and term premiums, rather than a single repurchase policy. As a result, the Treasury's actions can improve short-term liquidity and market sentiment, but it is difficult to change the structural pressure on America's long-term debt supply alone.
This policy environment is also being reflected in the dollar and asset prices. Citi lowered its US dollar forecast, believing that the Fed would turn to pigeons and that the repurchase of US bonds would put pressure on the US dollar; against the backdrop of a weak dollar, gold continued to strengthen, while BTC had accumulated a cumulative increase of about 19.9% since Monday, rising to around $75,400, and the 24-hour short position reached 1.08 billion US dollars, creating a clear bearish squeeze. Over the same period, cryptocurrency ETFs recorded a net inflow of about $859 million, including BTC ETF inflows of $606 million and ETH ETF inflows of $220 million, indicating that this round of gains has not only made up for short leveraged orders, but also spot capital has re-entered the market.
Therefore, what is really worth watching for BTC at present is not simply the expectation of interest rate hikes or interest rate cuts, but whether the US dollar, US bond yield, and liquidity can maintain the current combination. If long-term yield is suppressed by Treasury operations, the US dollar continues to weaken, and ETF capital inflows are maintained, BTC still has conditions to continue to be strong; conversely, if $40 trillion debt and inflationary pressure push up term premiums again and force the Federal Reserve to adopt a tighter policy, then the current high beta market in the crypto market will also face repricing pressure.
