stable coins
By Jean-Luc Maracon
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Hedge Funds Running at 18-to-1 Leverage. The hedge fund angle is probably the scariest part of this.
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Bitcoin Below $80,000, Tether in the Middle of It All. Bitcoin felt it too. As Treasury yields climbed in 2026, Bitcoin fell below $80,000.
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The numbers are staggering. Total marketable US Treasury debt blew past $30.2 trillion by the end of fiscal year 2025, and the country ran a $1.8 trillion deficit on top of that.
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That's the crux of the problem. Foreign central banks have been trimming their Treasury holdings for years, and the Federal Reserve has been doing the same after its…
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The hedge fund angle is probably the scariest part of this. Funds have been piling into the cash-futures basis trade — essentially leveraged arbitrage that exploits tiny price…
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Fed Governor Lisa Cook flagged the systemic risk of these leveraged positions in November 2025. She's not wrong to worry.
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Nearly $3 trillion of debt matured in 2025 alone, all of it needing to be refinanced with new buyers at current yields. And those yields aren't coming down.
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Bitcoin felt it too. As Treasury yields climbed in 2026, Bitcoin fell below $80,000. That kind of sensitivity to macro conditions wasn't always obvious in crypto markets, but…
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More context: DraftKings Bets on Federal Rules as Polymarket Insider Case Hits $1.2M
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But here's the twist. While Bitcoin was getting hit by Treasury dynamics, Tether was actually becoming a pillar of the Treasury market itself.
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The Congressional Budget Office has warned that interest payments could reach $2.2 trillion by 2036 if yields stay elevated. That's not a distant hypothetical.
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So what holds this together? Right now, it's a fragile mix: central bank backstops that were never meant to be permanent, hedge funds leveraged to the hilt, and stablecoin…
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More context: Bond Markets Defy the Fed as 30-Year Treasury Yield Nears 5.1% and Barclays Pushes Rate Cut to 2027
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Weekly market calendars are now dominated by Treasury auction results and refinancing schedules. That's the reality traders are living in.
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