‘Sell bonds, buy Bitcoin,’ proclaimed a popular social media account last week that repeated the emotions of many crypto-attorneys who believe customs-induced volatility in the US Treasurer Market — a cornerstone of Global Funding-Har revealed the fragility of dollar-denominated monetary system. However, institutions do not buy into this tale.
From Monday, the 11 US-Listed Spot Bitcoin ETFs, considered a power of attorney for institutional activity, were on the field to register the second highest cumulative monthly outflow of over $ 800 million, according to Data Source Sosovalue. The funds bleed a record $ 3.56 billion in February and $ 767 million in March.
Meanwhile, the three-month treasuries, auctioned to Monday, drew a strong demand from institutions. According to the data source CME, the US Treasury sold $ 80 billion in three months of bills at an interest rate of 4,225%, up from the previous 4,175%. Similarly, it sold $ 68 billion in six months of bills at a slightly higher than preliminary interest rate of 4.06%.
However, the bid-to-covering ratio that represents the number of the bids received in relation to the number of accepted bids increased, for the three months of bills increased to 2.96 from 2.82. In other words, for every three-month offer, almost 3 times more bids were received. The ratio of the six months of bills rose marginally to 2.90 from 2.79.
The strong admission indicates that institutions still consider US debt as a refuge. The T-rules are very fluid and are considered low-risk, making them the preferred choice for security in the repo (repurchase agreement) market. In one Repo transaction, a party sells T-bills or other securities to another, and accepts to repurchase them later, giving the seller access to short-term financing.
Institutions typically park money in T-bills when the economic prospects are uncertain, which requires flexibility in investment rather than commitment to long-term positions.
President Donald Trump’s full -blown trade war against China and other major trading partners has rattled uncertainty to such an extent that there is a sudden blackout in the company’s earnings guidance on Wall Street. According to Inc, BOFA’s 3-month guidance-which traces the number of companies above versus under the consensus guidance falls to 0.4x, it is weakest since April 2020 and below its historical average of 0.8x.
Meanwhile, US recession odds have risen over 50% on betting platforms, with elevated Japanese bond yields further complicating issues for risk assets.
