TFTC: A Bitcoin Podcast 674: How Hedge Funds Became America's Largest Creditor with Infranomics
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Oct 22, 2025 In this engaging discussion, Robert from Infranomics, a macro analyst specializing in Treasury markets, unveils how hedge funds now hold a staggering $1.8 trillion in U.S. debt through the basis trade. He explains the hidden risks of this leverage, the implications for liquidity during market stress, and how political tensions could exacerbate financial instability. Robert emphasizes Bitcoin as a crucial safe haven in an era of debasement and discusses the shifting importance of gold and bearer assets amid rising populism.
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TGA Rebuild Drained Liquidity And Tightened Funding
- TGA rebuild and reverse repo depletion removed about $500B liquidity, tightening funding and elevating SOFR spreads.
- Declining bank reserves and an emptied reverse repo magnify repo market fragility.
Unwind Mechanics Spike Yields And Destroy Liquidity
- A forced unwind sells cash treasuries and buys futures, pushing yields sharply higher and damaging liquidity.
- Prior episodes (March 2020, April) show how quickly this can spike yields and destabilize markets.
Foreign Shift From Treasuries To Gold Weakens Dollar
- Foreign buyers are reducing Treasury holdings and shifting to gold and other assets, pressuring dollar reserve status.
- A gradual revaluation could weaken the dollar versus the yuan and bid up gold in dollar terms.