"US Treasury May Increase Long-term Bond Issuance... Could Put Downward Pressure on Risk Assets Including Bitcoin"

Analysts suggest that if the US Treasury increases its long-term bond issuance, it could create downward pressure on risk assets including Bitcoin (BTC).

On the 21st, cryptocurrency service provider Matrixport stated in a research report, "With Scott Bejsent's appointment as the new US Treasury Secretary, the US bond issuance strategy could change," adding that "increased long-term bond issuance could lead to higher market interest rates and reduced demand for risk assets. This could also put downward pressure on Bitcoin's upward trend."

Previously, under Treasury Secretary Janet Yellen's tenure, short-term bond issuance expanded, leading to a decrease in long-term bond issuance. As long-term bonds became less attractive, investors moved to risk assets, and Bitcoin continued its upward trend.

The report also emphasized the importance of monitoring US broad money supply (M2) movements. It stated, "If the Federal Reserve expands M2 again, Bitcoin prices could rise further," but warned that "excessive M2 growth could raise concerns about inflation and increase the possibility of tightening policies, which could negatively impact Bitcoin's outlook."

Typically, M2 growth increases liquidity in the financial system, increasing investable funds, which tends to stimulate demand for risk assets like Bitcoin.

The report also added that dollar strength could reduce the investment appeal of risk assets. It further noted that investors should pay attention to Consumer Price Index (CPI) and Personal Consumption Expenditures (PCE) indicators, as they serve as key indicators determining Bitcoin price movements.