According to regulators including the Federal Reserve and Bank of England, hedge funds have accumulated a record $6.6 trillion in leverage to finance bets on U.S. Treasuries, with short positions in Treasury futures reaching historic extremes. The IMF’s April 2026 report flagged that some hedge funds have become “systemically important,” meaning individual stress could destabilize the broader financial system. Torsten Slok, chief economist at Apollo Global Management, warned that a forced unwind could transmit “shockwaves” through fixed-income markets.
Hedge funds now control 8% to 10.3% of the $31 trillion U.S. Treasury market, primarily through the “basis trade” arbitraging price gaps between futures and cash. The leverage is financed through repurchase agreements and prime brokerage deals, often with zero collateral requirements, making positions extremely sensitive to rate hikes or margin calls. Prime brokerage borrowing has reached $3.2 trillion, doubling since 2022.
Disclaimer: The information on this page may come from third parties and does not represent the views or opinions of Gate. The content displayed on this page is for reference only and does not constitute any financial, investment, or legal advice. Gate does not guarantee the accuracy or completeness of the information and shall not be liable for any losses arising from the use of this information. Virtual asset investments carry high risks and are subject to significant price volatility. You may lose all of your invested principal. Please fully understand the relevant risks and make prudent decisions based on your own financial situation and risk tolerance. For details, please refer to
Disclaimer.
Related Articles
Liquid Raises $18 Million for 24/7 Multi-Asset Trading Platform
Liquid announced it has raised $18 million in Series Seed funding to expand its multi-asset trading platform that provides continuous access to cryptocurrencies, equities, commodities, foreign exchange, and pre-IPO assets. The round was co-led by Neo and Left Lane Capital, with participation from se
GateNews59m ago
Energy Prices Become Key Variable for Fed Policy Path, Says Strategy Asset Managers CEO
Gate News message, April 29 — Thomas Hulick, CEO of Strategy Asset Managers, said energy prices have become the key variable in the Federal Reserve's policy trajectory as markets widely expect Fed Chair Jerome Powell and the Federal Open Market Committee to hold interest rates steady. Futures market
GateNews5h ago
Powell’s Final Press Conference Tonight: The Fed’s Regular Public Q&A May Become History
Tonight, Powell will hold what is likely his last regular press conference of his tenure. The Fed’s public Q&A format—or possibly the end of it—may come with Vosch taking over. This article analyzes the far-reaching impact of a shift in communication policy on markets and crypto assets.
GateInstantTrends8h ago
Powell will hold a press conference tomorrow morning. With it effectively certain that interest rates will not change, what should the market watch for in this Federal Reserve decision?
The Federal Reserve is expected to keep interest rates unchanged at 3.5–3.75% at its two-day meeting, and may slightly adjust the statement to strengthen support for employment and flexibility for future rate hikes. Chair Powell’s term ends on May 15, and markets are watching whether he will be reappointed and whether there will be personnel changes among the governors; Waller, if nominated to take over, will face pressures regarding independence and reforms, and Milan may be the last time he attends. This article focuses on tomorrow morning’s press conference and the direction of policy.
ChainNewsAbmedia9h ago
Gold Falls to $4,582.73/oz, Bitcoin Volatility Index Rises 0.53%
Gate News message, April 29 — Gold prices fell to $4,582.73 per ounce, down 0.31% today, while silver declined to $72.969 per ounce, down 0.15%.
The Bitcoin volatility index (BVIX) rose to 42.00, up 0.53% today. The Ethereum volatility index (EVIX) reached 58.82, down 2.94%.
In foreign exchange
GateNews10h ago
Bank of Japan keeps interest rate at 0.75%, while a stronger Japanese yen puts pressure on Bitcoin at $76,500
Bitcoin was temporarily trading around $76,500 on April 29, extending its downward trend. The U.S. dollar against the Japanese yen fell nearly 0.5% to 158.95. According to the Bank of Japan’s monetary policy decision published on April 28, the committee voted 6 to 3 to keep the benchmark interest rate unchanged at 0.75%. The three members who voted in favor of an immediate rate hike on that day prompted traders to raise the probability pricing for a rate hike on June 16 to 74%.
MarketWhisper10h ago
