Bitunix Analyst: CPI Shapes Rate Expectations — Dollar Liquidity Will Determine the Pressure on the Crypto Market

October 14 — Pressure on global capital markets is no longer just about the level of interest rates, but about governments and corporations simultaneously increasing their financing needs, competing for limited market funds. Bridgewater founder Dalio warned that the U.S. has about $10 trillion in maturing debt that needs to be rolled over this year, plus about $2.1 trillion in new borrowing needs; if investors demand higher yields before they are willing to absorb the supply, the government's interest burden could rise along with refinancing costs, creating a cycle in which debt and interest rates push each other higher.

Stock markets may also face changes in supply. Paul Tudor Jones warned that potential IPOs from AI companies such as OpenAI and Anthropic, combined with secondary offerings by corporations, could reverse the supply-demand structure that has been supported in the past by stock buybacks and mergers and acquisitions. When government debt issuance, corporate borrowing, and new share issuance all increase at the same time, investors must allocate funds across more assets, and it will become harder to support high valuations on growth expectations alone.

This competition for funds also directly affects the crypto market. Although BTC and ETH do not directly bear the U.S. government's debt costs, their valuations are still driven by dollar liquidity, real interest rates, and risk appetite. If U.S. Treasury yields remain high for a long time, funds can obtain more attractive returns from bonds, and with AI companies continuing to absorb financing, this could limit new capital flowing into crypto assets; if the market turns risk-off due to financing pressure, the unwinding of leveraged positions could also amplify volatility in BTC and other crypto assets.

In the short term, the focus is on the U.S. September CPI. The market expects headline inflation to rise to 3.6% year over year, core inflation at about 2.5%, and core month-over-month growth to slow to 0.2%. If core prices are moderate, cooling rate expectations could improve risk appetite in the crypto market; if the data exceed expectations, the dollar and yields could strengthen again, putting pressure on crypto assets. Even if inflation cools, it does not mean liquidity will immediately loosen, and it will still be necessary to watch whether long-end rates and capital allocation improve in tandem.