Back Research Notes Debt, Disruption, and Digital Gold: A Market at a Crossroads Published on May 25, 2025 By Jordi Visser In this week’s market update, the focus shifted sharply to the bond market as long-term U.S. Treasury yields surged toward levels not seen since the Global Financial Crisis. This move has reignited systemic risk concerns reminiscent of the UK’s 2022 “Liz Truss moment.” The video highlights how rising yields, deteriorating foreign demand, and an unsustainable fiscal trajectory—exacerbated by growing deficits and political resistance to austerity—are converging to challenge global capital markets. Discussions around capital controls, remittance taxes, and liquidity support suggest that policymakers are beginning to contemplate more interventionist approaches, which could mark a shift in regime from market-determined interest rates to more overt financial repression. Long-duration and illiquid assets, particularly in private equity and venture capital, remain structurally vulnerable under this backdrop. Meanwhile, artificial intelligence is fundamentally reshaping the macroeconomic landscape. Profit margins in AI-leveraged sectors continue to expand, decoupling equity performance from traditional rate sensitivity. The rapid rise in productivity, paired with fiscal incentives like bonus depreciation, is helping to offset the negative impact of higher rates and delaying the onset of recessionary pressures. In this environment, Bitcoin is framed as the primary beneficiary of growing distrust in fiat systems—fueled by central bank constraints, capital flow restrictions, and the accelerating digital asset infrastructure. With institutional adoption rising and Bitcoin now outperforming most other assets, the case is made for it emerging as the next global reserve alternative in an era defined by policy distortions and exponential technological change. Timestamps: 1. (00:00–03:20) Bond Market Becomes Risk Catalyst U.S. yields spike; fears of a “Liz Truss moment” grow. Global bond pressure synchronized across major markets. Policy response may include liquidity injections. 2. (03:20–06:10) Yields & Fiscal Shift 30-year yields near GFC highs; deficit path worsening. Growth over austerity becomes new narrative. Central banks face limited maneuvering room. 3. (06:10–07:37) AI Offsets Rate Risk AI boosts profit margins, supporting equities. 10-year yields remain below nominal GDP. Productivity spillover from tech to broader sectors. 4. (07:37–09:29) Debt & Recession Myths Leverage remains controlled; no broad credit stress. Delinquency fears overblown; data remains stable. Classic recession signals less reliable now. 5. (09:29–12:35) Capital Controls Discussion U.S. considers capital flow taxes, not just tariffs. Remittance taxes gaining traction. Gundlach, Gromen flag regime shift risk. 6. (12:35–16:34) Dollar Weakness & Repricing Risk Asia repatriates capital; T-bond demand declines. PE, VC, RE face valuation pressure. Endowments overexposed to illiquid assets. 7. (16:34–21:49) Equities Hold Despite Headlines Pullbacks shallow; hedge funds net short. MAG7 drives EPS strength (+28% YoY). Economic data supports soft landing view. 8. (21:49–27:32) AI & Asset Model Disruption PE model challenged—illiquidity + mispricing. AI accelerates obsolescence across sectors. Fed less likely to ease amid stable data. 9. (27:32–33:23) AI Drives Growth, Bitcoin Hedging Agents (Microsoft, Anthropic) accelerate adoption. Bitcoin linked to AI as value layer. Institutional BTC buying increases. 10. (33:23–42:29) Bitcoin Surge & Systemic Shift BTC hits highs; altcoins lag—suggests focused demand. Fiat debasement, capital controls fuel BTC case. Bitcoin emerging as fiat-alternative reserve asset. 🔗 Watch here