Deadly Bindings: How Do We Escape When the $37 Trillion US Treasury Bomb Hangs Over Crypto?

When 88-year-old Jim Rogers—founder of Quantum Fund and a precise warning of the 2008 financial crisis—began to liquidate US stocks and increase gold and silver holdings, the entire crypto community was still debating "whether to buy the dip." But the real danger has never been the crisis itself, rather the two increasingly intertwined "death cords" connecting the crypto market with traditional finance: one linked to $37 trillion in US Treasuries, the other tied to the US stock bubble. These two cords are transforming Crypto from a "decentralization dream" into a "systemic risk amplifier."

The Signal of the Big Player’s Silence: Why Are Rogers’ Actions More Terrifying Than Words?

This year, Rogers did two things: liquidated all US stocks and bought gold and silver. This is not investment advice but a natural risk-avoidance instinct. As of 2025, US debt exceeds $37 trillion, with annual interest payments reaching $880 billion—comparable to US military spending. The old fox sees through it: it’s not a question of "if" it will explode, but "when."

The problem is, when this "US debt nuclear bomb" detonates, the crypto market won’t be able to stay uninvolved; instead, it will be among the first to face the shock. Because Crypto has long been connected to TradFi via two deadly cords, forming a distorted symbiosis of "life and death."

First Binding: The $260 Billion Stablecoins and US Treasuries’ "Death Loop"

This is the cruelest irony in the crypto world: our proud "decentralized" liquidity is actually based on the "most centralized" US Treasuries.

Currently, the total stablecoin market exceeds $260 billion, with over 70% of reserves in mainstream stablecoins like USDT and USDC held in US Treasuries and short-term government bonds. This seemingly stable model actually harbors the fuse for a "bank run tsunami."

The Four Stages of Crisis Propagation

1. US Debt Trust Collapse: failure of debt ceiling negotiations, credit rating downgrades, or runaway inflation cause US debt prices to plummet.

2. Reserve Asset Shrinkage: issuers like Circle and Tether see the value of their US debt holdings evaporate, with collateral ratios falling below 1:1.

3. Redemption Panic Spreads: users franticly withdraw, stablecoins lose their peg (e.g., the 2022 UST incident).

4. Crypto Liquidity Freeze: without stablecoins as a trading medium, assets like Bitcoin and Ethereum will face "priced but illiquid" situations, with prices potentially crashing over 40% in a single day.

The US Treasury predicts that by 2028, stablecoins will surpass $2 trillion, accounting for 5% of the US debt market. Once a crisis erupts, this will no longer be a "small fight in the coin circle," but a nuclear-level event directly impacting the US debt system.

Even more dangerous, in December, the Fed’s FOMC canceled the $500 billion daily limit for the Standing Repo Facility (SRP), allowing banks to borrow against unlimited amounts of Treasuries. While this temporarily boosts liquidity, it deepens the fragility of the banking system tied to US debt. When US debt issues surface, the Fed’s own balance sheet will be at risk.

Second Binding: Bitcoin and US Stocks’ 0.88 Correlation "Falling Together"

The narrative of "Bitcoin as digital gold" has been thoroughly discredited by 2025. Recent data shows Bitcoin’s rolling correlation with the S&P 500 fluctuates wildly between 0.5 and 0.88, with Nasdaq’s correlation reaching as high as 0.92. This means: a sneeze in US stocks can cause Bitcoin to run a fever of 40°C.

AI Bubble: The Damocles Sword Hanging Over Our Heads

Rogers’ warning about the AI bubble is the most dangerous trigger connecting the two:

• Nvidia’s market cap once surpassed $3.6 trillion, equivalent to the combined value of Europe’s top 20 companies.

• Tech giants are heavily cashing out: Jensen Huang, Bezos, Zuckerberg, etc., have sold over $20 billion worth of stock in 2024-2025.

• Valuation bubble: AI concept stocks have an average P/E ratio of 80, far exceeding the 60 of the 2000 internet bubble.

When the AI bubble bursts, US stocks will inevitably crash. Due to the 0.88 correlation, Bitcoin will crash simultaneously, with even larger declines. This is not a prediction but cold mathematics.

The November 2025 market confirmed this: Bitcoin ETF experienced a record net outflow of $3.6 billion, while the S&P 500 fell 4.4%, nearly in sync. Institutional research reports clearly state: "Bitcoin shows synchronized correction with US stocks during stress periods, driven by macro liquidity."

Market’s Red Flags

While Rogers’ warning is sounding, three major cracks have already appeared within the crypto market:

5. Liquidity Divergence Worsens

Bitcoin whales are aggressively accumulating around $80,000, while retail investors panic-sell. This high concentration of holdings means: if institutions are forced to deleverage due to the US stock crisis, a sell-off could be devastating. Data shows the top 1% of Bitcoin addresses control over 90% of circulating supply.

6. ETF "Double-Edged Sword" Effect

After the 2024 approval of Bitcoin ETFs, institutional holdings surged to $179 billion. But this fully integrates Crypto into traditional finance. Referring to the 2008 crisis, gold initially declined because institutions prioritized selling high-risk assets to meet margin calls. The massive outflows from Bitcoin ETFs have already proven this.

7. Regulatory "Looseness on the Surface, Tightness Beneath"

The US Treasury is pushing for stablecoin legislation requiring issuers to hold 100% cash or short-term US Treasuries as reserves. While seemingly protecting investors, it actually tightens the binding of stablecoins to the US debt engine. The more "compliant" the regulation, the higher the risk concentration.

Four-Level Defense System: From Deleveraging to Preserving the Spark

As someone who has experienced three bull-bear cycles, I’ve combined the latest data with Rogers’ strategy to develop this defense system:

Level 1: Urgent Deleveraging (Within 24 Hours)

Although the current BVIV (Bitcoin Volatility Index) has fallen from 65% to 51%, this is the "calm before the storm." Immediately close all contracts and leverage, reducing positions to zero. This is not advice, but survival rule.

Level 2: Build a "High-Quality Cash" Fortress

Liquidity is king during crises, but fiat currency has pros and cons:

• USD Cash (30-40%): stored in FDIC-insured accounts, no more than $250,000 per account

• Short-term US Treasury ETF (20%): maturity under 90 days, highest liquidity

• Offshore USD (10%): diversifies geopolitical risk; Hong Kong and Singapore accounts preferred

Avoid altcoins: in liquidity crises, 90% of altcoins will go to zero; Luna’s collapse in 2022 was just a prelude.

Level 3: Allocate "True Safe-Haven Assets"—Silver Over Gold

Rogers’ purchase of gold is correct, but silver might be a better choice:

• Shortage in physical silver: industrial demand grows 15% annually, huge consumption in photovoltaics and electronics

• Value gap: gold-silver ratio at 80:1, historical average 60:1, silver undervalued by 25%

• On-chain verification: tokenized silver trading volume recently hit record highs with silver prices, confirming safe-haven logic

Level 4: Keep a "Seed Position" (No more than 5%)

Only hold Bitcoin/Ethereum bought at least 30% below current prices, transfer to cold storage, and hold for 5 years. Remember, these are "digital antiques," not trading chips.

Ultimate Answer: Crypto is a risk asset, but it could become a future safe haven

Short-term (6-12 months after crisis): Crypto as a "fighter jet" among risk assets, with potential declines over 70%. Stablecoins will face the toughest trust test; Bitcoin may test support at $50,000.

Long-term (3-5 years after crisis): If traditional finance collapses due to debt spiral, decentralized Crypto could become the "New Ark." But this presupposes you survive the short-term storm.

As Cantor Fitzgerald’s latest report states: "A new crypto winter may emerge in 2026, but it will be more institutionalized and orderly." Winter kills the weak and clears the battlefield for survivors.

The death bindings must be severed, but the game is not over

Rogers’ warning is not the death knell but a starting gun. It reminds us: the deadly bindings between Crypto and TradFi must be cut now, or the entire industry will be swallowed by the debt black hole of traditional finance.

Next, I will track three deadly indicators daily:

8. US 2-10 Year Treasury Spread (Inversion Level)

9. Stablecoin Reserve Transparency and Redemption Data

10. 60-Day Rolling Correlation Between Bitcoin and US Stocks

These data will be updated in real-time in the comments, and my position adjustments will be synchronized. Survive to tell the new story in the next cycle.

Are you still holding leveraged positions? Do you think the stablecoin-US debt binding is the biggest systemic risk? Share your defense strategies!

If this article helped you recognize the risks, please like and share with more crypto friends, so more people can prepare before the storm hits! #加密行情预测 $BTC