TechFlow, October 21 — Deutsche Bank has issued a warning: leverage frenzy in U.S. stocks is reemerging, with margin debt as a percentage of GDP approaching historical peaks. Data shows that from April to September, NYSE margin debt surged by 32.4%, the second-highest increase since records began, surpassed only by the periods of the 2000 dot-com bubble and the 2020 stimulus-driven rally. Deutsche Bank notes that overall margin leverage in U.S. equities has already exceeded levels seen before the bubbles of 1999 and 2007. Investors are piling on additional leverage atop already high levels, shifting market sentiment from rational optimism to irrational exuberance. With no current fiscal or monetary easing to provide support, market resilience may be significantly weakened.
BiyaPay analysts highlight that the danger of this latest round of leverage lies in the absence of liquidity and policy safety nets. Should risk assets correct, it could trigger a chain reaction of deleveraging. Investors should focus on safe-haven assets and volatility arbitrage opportunities, avoiding blind momentum chasing. In the event of a market pullback, high leverage will likely compress valuation space for volatile assets like Bitcoin. Investors should be cautious—Bitcoin could face a deeper-than-expected decline. Users can trade U.S. and Hong Kong stock index futures via BiyaPay using USDT, enabling flexible positioning during high-volatility phases. BiyaPay supports both USDT spot and futures trading, with zero maker fees on contracts, helping users participate in global asset allocation at lower cost.
