Lately, I've been a bit chilled by the global debt data. According to forecasts for 2026, the global debt-to-GDP ratio is expected to reach 235%, and this number is essentially a ticking time bomb in the crypto world.

Over the past few years, I've seen quite a few scenes— the 2018 bear market, the 2022 blow-up events. Looking back now, the worst times for losing money are often when global liquidity suddenly tightens. The crypto market is like a magnifying glass, amplifying the pulse of global finance several times over. The US national debt stands at 38 trillion dollars, and Japan's debt ratio is as high as 230%. These figures are not scare tactics—they directly impact how much money is flowing globally, ultimately determining whether assets like Bitcoin and Ethereum are worth anything.

The current playbook in the US is clear: new debt pays off old debt. As long as the market still trusts the dollar, this game can continue. But what if that confidence collapses? The Federal Reserve's only options are to lower reserve requirements and flood the market with liquidity, printing money to rescue the economy. On the surface, this might cause crypto assets to rise temporarily with the water level, but in reality, it's like drinking poison to quench thirst. What follows are more aggressive rate hikes and more radical balance sheet reductions, which will drain blood from the entire market, with high-risk assets like crypto taking the hardest hit.

Japan's situation is actually more dangerous than the US. With a debt ratio exceeding 230%, an aging population that worsens year by year, fewer young people, insufficient labor force, and sluggish economic growth—basically, they have no capacity to service debt through economic growth and can only rely on asset liquidation. A recent detail is particularly striking— the Bank of Japan has quietly started reducing its holdings of US Treasuries. This is not a small move; it’s a signal that they are preparing for a large-scale asset sell-off.

Once Japan begins to sell assets on a large scale to pay off debt, a domino effect will ripple through the global financial markets. Stock markets will plummet, bond markets will decline, and foreign exchange markets will fluctuate wildly. These will follow one after another. As the highest-risk asset class, crypto will be panic-sold by investors, and it’s not uncommon for Bitcoin to directly fall below the psychological threshold of 20,000.

So, the signals to watch most closely now are: what is the Federal Reserve’s true intention, how will the attitude of global central banks toward US debt shift, and whether large funds are actively positioning or quietly reducing their holdings. Combining these signals can basically help us judge the next trend in the crypto market. Instead of blindly bottom-fishing, it’s better to understand the overall picture first. At least this way, you can reduce potential losses— and that’s already a win.