This article is based on an epic article by Arthur Hayes, the former CEO of Bitmex, read it in full here.
A recent escalation of violence between Israel and Palestinian militant group Hamas has raised concerns about broader geopolitical implications. This conflict comes at a perilous moment for US Treasuries and could act as a catalyst for shifting investor funds into cryptocurrencies.
Keypoints
- The conflict between Israel and Hamas has wider geopolitical implications, potentially drawing in the US, Iran, Russia, and China. This could lead to increased military spending by major powers.
- The Fed signaling a pause in rate hikes has led to a “bear steepener” in the US Treasury yield curve, with long-term yields rising faster than short-term. This is problematic for banks’ hedging strategies.
- The bear steepener and potential for higher US military spending is causing a sell-off in long-term Treasuries. Yields are…
