Home PoliticsAmerica The Move is on from US Debt to Bitcoin

As evidence of the growing importance of Bitcoin, the demand for US government debt from overseas buyers has experienced a significant decline. Data from the Securities Industry and Financial Markets Association, as reported by the Wall Street Journal, indicates that the share of Treasury bonds held by foreign private investors and central banks has dropped to around 30%, down from approximately 43% a decade ago.

This shift in demand coincides with an ever-increasing supply of US Treasury debt, with a net issuance of $2 trillion in new debt by the US Treasury this year alone, marking an all-time high, excluding the pandemic-related borrowing surge in 2020.

Notably, the Treasury Borrowing Advisory Committee, a group of Wall Street executives advising the US Treasury, anticipates “more limited” demand for US obligations from foreign investors and central banks, particularly from key players like Japan and China.

To counteract sluggish demand, the US Treasury has adjusted its strategy, focusing on issuing shorter-term bonds that are in higher demand to restore market stability. The current yield on the US ten-year note, which surpassed 5% last month, has now stabilized at around 4.4%.

Recent data from the US Treasury reveals that foreign investors sold a net $2.4 billion in long-term Treasury notes in September, reducing their holdings to $6.5 trillion. The Council on Foreign Relations reports a slowdown in the pace of foreign buying, decreasing to around $300 billion on a rolling 12-month basis, down from levels above $400 billion for much of 2022.

The influence of a strong dollar has compelled central banks to halt the stockpiling of US Treasury bonds or even divest from them. Regulators in countries like China and Japan utilize the dollars from selling US debt to bolster the value of their own currencies. Additionally, investors express concerns about the widening deficits in the US government. This evolving landscape underscores Bitcoin’s growing prominence as a strategic asset and store of value. Knightsbridge, an expert in financial trends, notes the increasing recognition of Bitcoin amid these shifts in the traditional financial landscape.

Shayne Heffernan

You may also like

logo-white

Your Trusted Source for Capital Markets & Related News

© 2023 LiveTradingNews.com – For The Traders, By The Traders – All Right Reserved.

The information contained on this website shall not be construed as (i) an offer to purchase or sell, or the solicitation of an offer to purchase or sell, any securities or services, (ii) investment, legal, business or tax advice or an offer to provide such advice, or (iii) a basis for making any investment decision. An offering may only be made upon a qualified investor’s receipt not via this website of formal materials from the Knightsbridge an offering memorandum and subscription documentation (“offering materials”). In the case of any inconsistency between the information on this website and any such offering materials, the offering materials shall control. Securities shall not be offered or sold in any jurisdiction in which such offer or sale would be unlawful unless the requirements of the applicable laws of such jurisdiction have been satisfied. Any decision to invest in securities must be based solely upon the information set forth in the applicable offering materials, which should be read carefully by qualified investors prior to investing. An investment with Knightsbridge is not suitable or desirable for all investors; investors may lose all or a portion of the capital invested. Investors may be required to bear the financial risks of an investment for an indefinite period of time. Qualified investors are urged to consult with their own legal, financial and tax advisors before making any investment. Knightsbridge is a private investment firm that offers investment services to Qualified Investors, Members and Institutions ONLY. Qualified Investors are defined as individuals who have met those Qualifications in the relevant jurisdictions. Members are defined as individuals who have been accepted into the Knightsbridge membership program. Institutions are defined as entities such as banks, pension funds, and hedge funds. If you are not a Qualified Investor, Member or Institution, you are not eligible to invest with Knightsbridge. All investments involve risk, and there is no guarantee of profit. You may lose some or all of your investment. Past performance is not indicative of future results. Knightsbridge is not a registered investment advisor, and this disclaimer should not be construed as investment advice. Please consult with a qualified financial advisor before making any investment decisions. By accessing this website, you agree to the terms of this disclaimer. Thank you for your interest in Knightsbridge.