Liquidity tides are changing direction. 2026 is not just a year on the calendar but a critical moment that could reshape the global capital flow landscape.

The United States is facing a wave of massive debt maturities. Official data shows that in 2026, the US will have up to $4.1 trillion in maturing tradable government bonds. When including rolling over short-term Treasury bills and local debts, the total refinancing demand could reach $7-12 trillion. This enormous debt pressure is like an iceberg floating above the global capital markets; once it melts, it will not only impact traditional financial systems but also serve as a severe stress test for the crypto market.

**How does debt transmission affect the crypto market?**

This cycle differs from the rate hike cycle of 2022. Back then, the goal was to control inflation by suppressing demand. In contrast, the debt refinancing in 2026 is essentially a "rigid repayment liquidity trap"—the US government must issue large amounts of new debt to cope with maturing old debt and ongoing fiscal deficits.

In a high-interest-rate environment, newly issued bonds need to offer higher yields to attract investors. This will trigger two chain reactions:

First, a large-scale withdrawal of funds from risk assets. Cryptocurrencies, stocks, and other high-risk assets will lose their appeal as investors flock to relatively safe and stable-yield options like US Treasuries. This is a classic "bloodletting effect," where liquidity is drained from the market.

Second, federal fiscal pressure will worsen further. US annual interest payments are destined to surpass $1 trillion, a staggering figure that will consume a larger portion of government revenue. Under these circumstances, the Federal Reserve may be forced to re-enter the market in some form later on, but doing so will only sow more inflationary risks and currency devaluation in the future.

The crypto market is standing at a critical juncture. Projects that rely on loose liquidity conditions will be the first to be affected, while assets with strong fundamentals may be able to withstand the pressure. This is not only a risk but also an opportunity for differentiation.