Summary
BroadChain learned that at 00:00 on April 20, according to CryptoNews, former US Treasury Secretary Henry Paulson, who led the 2008 financial crisis bailout, issued a warning that the $35 trillion US debt could trigger a Treasury market crash, urging authorities to formulate emergency 'circuit breaker' plans before a crisis erupts. The transmission path to the crypto market is direct and clear: disorderly bond selling will rapidly tighten US dollar liquidity, and history shows that before Bitcoin's safe-haven narrative solidifies, tightening dollar liquidity first punishes risk assets. The 30-year US Treasury yield has broken through 5%, a level last breached during the inflation surge in October 2023, and after the pre-Great Recession era,
According to BroadChain, at 00:00 on April 20, CryptoNews reported that former U.S. Treasury Secretary Henry Paulson, who led the 2008 financial crisis rescue, issued a warning that the $35 trillion U.S. debt could trigger a collapse in the Treasury bond market. He urged authorities to formulate an emergency "circuit breaker" plan before the crisis erupts. The transmission path to the crypto market is direct and clear: disorderly bond selling will quickly tighten dollar liquidity, and history shows that before Bitcoin's safe-haven narrative takes shape, tightening dollar liquidity first punishes risk assets. The yield on 30-year U.S. Treasury bonds has exceeded 5%, a level last breached during the inflation surge in October 2023 and rarely seen since the pre-Great Recession era. This is not an isolated warning signal but an alarm amplified by Paulson's authoritative voice. Paulson fears that Treasury bond demand could suddenly collapse due to the "laws of economic gravity," triggering nonlinear shocks. The precedent from April 2025 has clearly demonstrated the transmission mechanism: amid concerns over escalating tariffs, U.S. Treasury yields surged, and crypto assets did not turn to safe havens but were sold off alongside stocks, maintaining their correlation with risk assets. In a real bond market shock, the first phase is typically panic selling, where all assets, including Bitcoin, may be indiscriminately sold, as happened in March 2020. Similar warnings from JPMorgan Chase CEO Jamie Dimon about rising Treasury yields potentially pushing up mortgage rates reinforce Paulson's argument from another angle, although current Treasury Secretary Scott Bessent publicly refuted Dimon's warning on June 1, 2025.
