At the moment when the US Department of Commerce announced that the core PCE price index rose by 2.6% year-on-year in April, Wall Street traders collectively held their breath. This inflation data, which fell short of expectations, should have ignited a beacon for risk assets, yet it barely created ripples in the cryptocurrency market. Bitcoin lingered around the $280,000 mark, on-chain data showed that large whale addresses experienced net outflows for three consecutive days, and the Grayscale Bitcoin Trust's premium rate fell to -12%. This unusual calm reveals the capital market's deep skepticism toward the 'soft landing narrative.'

More troubling is the cross-market dislocation: the steepening trend of the US Treasury yield curve remains unchanged, with the real yield on 10-year Treasury bonds climbing to an annual high of 1.8%, yet it failed to attract capital inflows. This paradox of 'favorable data and market indifference' resembles a preview of the liquidity freeze that followed the bankruptcy of Lehman Brothers in 2008. The current fragility of the financial system is starkly evident in the 'death spiral' of Bitcoin and US Treasuries, with hedge funds forced to adjust positions, Wall Street institutions accelerating the sell-off of short-term Treasuries, and money market funds preferring to consume the 'cold leftovers' of US Treasuries with negative yields rather than turning to risk assets.

If the cryptocurrency market continues to lose heat, the US Treasury market may face triple shocks: a pricing power crisis could erupt as Bitcoin ETF inflows fall below $1 billion for two consecutive weeks; the Treasury's plan to issue $1.2 trillion in bonds in Q3 may be forced to raise yields to above 3.5%; and S&P Global's rating model shows that if the yield on 10-year US Treasuries exceeds 4.2%, it could shake the US sovereign credit rating. The current market silence is akin to the calm before the storm. The crypto market is experiencing the growing pains of an 'expectation reset,' while the Treasury market is undergoing the ultimate test of trust. This silent struggle may redefine the survival rules of the 21st-century financial system.

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