Vicky117
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The year $BTC 2025 is a year when Bitcoin entered its mature phase. In the short term, institutional and regulatory support will drive upward momentum. The inflow of ETF funds and a regulatory-friendly environment make it highly likely to reach $200,000 by the end of this year. However, volatility and policy variables should not be underestimated, and there will be significant fluctuations in between, so it is important to hold on tight.
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The difficulties faced by the United States Treasury bonds in the future can be analyzed from four aspects: finance, economy, market, and politics:
⸻
1. Surge in interest expense pressure
• With the Federal Reserve raising interest rates, the average interest rate of U.S. bonds has increased, raising the costs of new and refinancing debts.
• Interest expenses are projected to exceed $1 trillion by 2025, even surpassing the military budget, becoming the fastest-growing item in the federal budget.
• The burden of interest expenses crowds out other expenditures (education, infrastructure) or forces the government to borrow further, creating a vicious cycle.
⸻
2. Persistently high deficits, fiscal convergence difficult
• The annual budget deficit still exceeds $1.5 trillion, while Congress is divided on tax reform and spending cuts.
• Even with economic growth, the U.S. government still cannot balance income and expenditure. If an economic recession occurs, tax revenues will decline, and expenditures will rise, causing debt to surge.
⸻
3. Risk of credit rating downgrade and confidence crisis
• Moody’s has downgraded the U.S. sovereign credit rating from Aaa to Aa1, and if deficits continue without improvement, it may be downgraded again in the future.
• A downgrade in rating will lead to increased borrowing costs, investors seeking safe havens, and could even undermine the international trust in the U.S. dollar.
⸻
4. Weakening demand for bonds in the market
• Major overseas buyers like Japan and China are reducing their holdings of U.S. Treasury bonds, focusing instead on domestic assets.
• Investors are concerned about the sustainability of long-term debt, demanding higher returns, which raises yields and drags down the stock and housing markets.
⸻
5. Limited policy space for the Federal Reserve
• If the Federal Reserve continues to raise high interest rates to curb inflation, it will increase borrowing costs and interest expenses.
• If it lowers interest rates to stimulate the economy, it may reignite inflation, creating a dilemma that also causes uncertainty in the Treasury bond market.
⸻
6. Political deadlock and debt ceiling crisis
• The U.S. Congress often fails to adjust the debt ceiling or formulate a long-term fiscal roadmap in a timely manner due to partisan disputes.
• Whenever debt ceiling negotiations stall, it could lead to market panic (as seen in 2011 and 2023), damaging credit and stability.
⸻
1. Surge in interest expense pressure
• With the Federal Reserve raising interest rates, the average interest rate of U.S. bonds has increased, raising the costs of new and refinancing debts.
• Interest expenses are projected to exceed $1 trillion by 2025, even surpassing the military budget, becoming the fastest-growing item in the federal budget.
• The burden of interest expenses crowds out other expenditures (education, infrastructure) or forces the government to borrow further, creating a vicious cycle.
⸻
2. Persistently high deficits, fiscal convergence difficult
• The annual budget deficit still exceeds $1.5 trillion, while Congress is divided on tax reform and spending cuts.
• Even with economic growth, the U.S. government still cannot balance income and expenditure. If an economic recession occurs, tax revenues will decline, and expenditures will rise, causing debt to surge.
⸻
3. Risk of credit rating downgrade and confidence crisis
• Moody’s has downgraded the U.S. sovereign credit rating from Aaa to Aa1, and if deficits continue without improvement, it may be downgraded again in the future.
• A downgrade in rating will lead to increased borrowing costs, investors seeking safe havens, and could even undermine the international trust in the U.S. dollar.
⸻
4. Weakening demand for bonds in the market
• Major overseas buyers like Japan and China are reducing their holdings of U.S. Treasury bonds, focusing instead on domestic assets.
• Investors are concerned about the sustainability of long-term debt, demanding higher returns, which raises yields and drags down the stock and housing markets.
⸻
5. Limited policy space for the Federal Reserve
• If the Federal Reserve continues to raise high interest rates to curb inflation, it will increase borrowing costs and interest expenses.
• If it lowers interest rates to stimulate the economy, it may reignite inflation, creating a dilemma that also causes uncertainty in the Treasury bond market.
⸻
6. Political deadlock and debt ceiling crisis
• The U.S. Congress often fails to adjust the debt ceiling or formulate a long-term fiscal roadmap in a timely manner due to partisan disputes.
• Whenever debt ceiling negotiations stall, it could lead to market panic (as seen in 2011 and 2023), damaging credit and stability.
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