Binance: "US Treasury issuance will exceed $31 trillion... Negative for the market"

As the issuance of US Treasury bonds is expected to increase significantly, it is analyzed that this could act as a negative factor in the risk asset market.

On the 18th (local time), Binance Research stated in a report, "It is expected that the issuance of US Treasury bonds will exceed $31 trillion this year," and "Participants in the virtual asset (cryptocurrency) market should closely monitor the impact of large-scale Treasury issuance." It added, "The pressure of rising interest rates due to the increase in US Treasury supply will also be a negative factor for the virtual asset market."

Binance focused on the scale of Treasury issuance. The report stated, "The expected scale of Treasury issuance is at an all-time high. It corresponds to 109% and 144% of the expected US GDP and M2 (financial products issued by deposit-taking institutions, cash currency, settlement deposits, deposits under two years), respectively," and "There is inevitably continuous pressure for interest rate increases." Consequently, if interest rate hikes are decided, investment sentiment in the risk asset market will be dampened, ultimately negatively affecting virtual assets.

The report stated, "However, if the US government issues additional currency to directly purchase the debt, it could be a positive factor for the market," and "There is also some possibility that Bitcoin could emerge as a hedge against currency value decline."