Record Overseas Demand for US Stocks Fuels Bitcoin Rally
Overseas investors are aggressively buying US stocks, with net inflows reaching a record $942 billion over the past 12 months. According to data from the US Department of the Treasury, this is the highest rolling 12-month total since records began in 1985.
The second quarter saw an even higher net purchase volume, at $426 billion, setting a new single-quarter record for overseas demand for US stocks.
However, this surge in US stock buying has coincided with a decrease in overseas demand for US Treasuries. The result is that the US faces higher costs in government debt financing due to rising Treasury yields and expectations of further rate hikes.
In response to these changes, Bitcoin has surged 45% since July, as investors seek alternative assets to mitigate their exposure to US dollar-denominated instruments.