"Decline of Treasuries: Shaping Risk Assets with a Sword"

US Treasury Bonds and Foreign Investors

According to recent data, Denmark has cut its holdings in US Treasury bonds by 30%, reaching record low levels. Denmark's Treasury bond holdings have fallen to $9 billion, a decrease of approximately $4 billion, marking the lowest level in the last 14 years. Investment Director Anders Schelde stated that the pension fund will sell US Treasury bonds citing the weak financial structure of the US government.

Withdrawal of Major Investors

US Treasury Secretary Scott Bessent downplayed Denmark's withdrawal, stating it is insignificant; however, this situation is not unique to one country. China has reduced its US Treasury bond holdings to the lowest level in 17 years, decreasing from $688.7 billion in October to $682.6 billion in November. India has also followed a similar path, lowering its holdings to approximately $190 billion by October 2025.

Investor Psychology and Market Reactions

Such withdrawals indicate that major foreign investments are reassessing the credit risk of the US. Analysts note that the size and continuity of these sales extend beyond routine portfolio balancing. The increasing concern about the US's fiscal sustainability and credit quality may trigger volatility in the markets.

Alternative Investment Options and the Cryptocurrency Market

Japan and the UK continue to increase their holdings in US Treasury bonds. Japan raised its position to $1.2 trillion, with a $2.6 billion increase. Ray Dalio emphasized that global central banks are shifting towards various alternatives other than US assets, while also pointing out that rising liquidity and financing costs may negatively impact cryptocurrency assets. High-yield bonds could lead to tighter financial conditions, putting pressure on stocks and cryptocurrency assets.

Conclusion

The fluctuations around US Treasury bonds, which are critical for the global economy, are drawing investor attention. This situation may increase risk perception in the markets and threaten financial stability.