Behind Rogers' Warning: The Crypto Market's "Deadly Bond" Is Creating a $37 Trillion Time Bomb

When Jim Rogers issued a warning of "the worst financial crisis in history by 2026," the entire crypto community was debating whether to liquidate. But the real danger has never been the crisis itself, but the two invisible "umbilical cords" connecting the crypto market to the traditional financial system—one linked to $37 trillion in US Treasuries, the other tethered to the US stock bubble. These two cords are turning crypto from a "decentralized dream" into a "systemic risk transmitter."

The Signal from the Silence of the Big Players: Why is Rogers Liquidating US Stocks and Buying Gold?

First, let's get to know this 88-year-old "old fox." Jim Rogers, co-founder of Quantum Fund, old partner of Soros, is a legendary figure who accurately warned of the 2008 financial crisis and profited from shorting. This year, he did two things: liquidated all US stocks and increased holdings in gold and silver. This is not just a viewpoint—it's action—because in investing, action is worth 100 times more than words.

Latest data shows that the US national debt has officially surpassed $37 trillion, with annual interest payments exceeding $800 billion—more than US military spending. Rogers sees clearly: this is no longer a question of "whether problems will occur," but "when the explosion will happen."

But the problem is, when this "US debt nuclear bomb" detonates, do you think hiding in the crypto market will keep you safe? Too naive. Crypto won't just be unable to escape; it will become the first battleground to be destroyed.

The First Deadly Umbilical Cord: The "Death Dance" Between $260 Billion Stablecoins and $37 Trillion US Treasuries

Here's the most ironic truth in the crypto market: the so-called "decentralized" cryptocurrencies rely entirely on the most centralized asset—US Treasuries—for liquidity.

By 2025, the total stablecoin market size has surpassed $260 billion. USDT, USDC, and other "digital dollars" you use daily are backed by over 70% in US Treasuries and short-term government bonds. It's like building skyscrapers on quicksand—if US Treasuries are stable, crypto is stable; if US Treasuries collapse, crypto will perish.

How does a "bank run tsunami" happen?

Imagine this chain reaction:

1. US debt crisis triggers: debt ceiling negotiations fail, credit rating is downgraded, or inflation spirals out of control, causing US Treasuries to plummet in value.

2. Stablecoin reserves shrink: issuers like Circle, Tether see the value of their US Treasury holdings evaporate.

3. Trust collapses: market panic ensues, users rush to redeem stablecoins for real USD.

4. Liquidity dries up instantly: exchanges can't handle massive redemptions, stablecoins lose their peg (like UST in 2022).

5. Crypto market freezes: without stablecoins as a trading medium, Bitcoin and Ethereum can't be sold, and prices are halved again and again.

This is not alarmism. The US Treasury Department's latest forecast predicts that by 2028, stablecoins will surpass $2 trillion, with a significant portion—about 5% of the US debt market—tied to crypto via stablecoins. Once a crisis erupts, this is no longer a "small problem in the crypto circle," but a systemic risk directly impacting the US debt market.

As the stablecoin report states: "Even fully collateralized stablecoins may face liquidity constraints during market stress, and issuers may be forced to liquidate assets under unfavorable conditions, exacerbating liquidity crises."

The Second Deadly Umbilical Cord: Bitcoin's 0.8+ Correlation with US Stocks Leading to "Mutual Destruction"

Remember the narrative that "Bitcoin is digital gold and a safe haven"? Now, that's just a joke.

Latest data in 2025 shows that the 30-day rolling correlation between Bitcoin and the S&P 500 fluctuates between 0.5 and 0.88, with Nasdaq correlation once reaching 92%. This means that when US stocks sneeze, Bitcoin not only catches a cold but runs a fever of 104°F.

The AI Bubble: The Sword of Damocles Hanging Over US Stocks

Rogers' warning about the AI bubble is the most dangerous trigger connecting Bitcoin and US stocks. Look at these numbers:

• Nvidia's market cap once exceeded $3.6 trillion, equivalent to the combined market cap of Europe's top 20 companies.

• Tech giants like Huang Renxun, Bezos, Zuckerberg, etc., have collectively cashed out over $20 billion in 2024-2025.

• AI concept stocks have an average P/E ratio of 80, far exceeding the 60 in the 2000 internet bubble.

When the AI bubble bursts, US stocks will inevitably crash. Due to the 0.8+ correlation, Bitcoin will crash simultaneously, with even larger declines. This is not prediction—it's mathematics.

This trend has been validated in recent market volatility: in November 2025, Bitcoin ETFs experienced a record $3.6 billion net outflow, while the S&P 500 fell 4.4%, nearly in lockstep. Institutional research reports explicitly state: "In stress periods, Bitcoin and US stocks tend to move in sync, driven by the Fed's hawkish stance and inflation concerns."

Market Warning Signs

While Rogers' warning is issued, unsettling cracks are appearing within the crypto market:

6. "Whale" vs. retail split: Data shows Bitcoin whales are aggressively accumulating around $80,000, while retail investors panic-sell. This high concentration of holdings means market liquidity is controlled by large institutions. If these institutions are forced to deleverage due to the US stock crisis, a massive sell-off could be devastating.

7. The "double-edged sword" of spot ETFs: After the approval of Bitcoin ETFs in 2024, institutional holdings surged to $179 billion. But this also fully integrates crypto into traditional finance. When a financial crisis hits, institutions will prioritize selling high-risk assets (like Bitcoin) to meet margin calls—similar to how gold initially declined in 2008.

8. The Fed policy trap: According to user-shared mechanisms for 2025, the December FOMC meeting canceled the daily limit for the Standing Repo Facility (SRP), allowing banks to borrow unlimited amounts against US Treasuries. While this increases liquidity, it also deepens the fragility of the banking system tied to US Treasuries. If US Treasuries falter, the Fed's own balance sheet could be at risk.

Crypto Analysts' "Lifeline": How to Escape Before the Bonding Breaks?

As a veteran who has survived 8 years in crypto and gone through 3 bull-bear cycles, I combine Rogers' strategy with current market data to summarize a "Three-Stage Defense System" that has proven effective in reducing risk exposure:

Step 1: Urgent Deleveraging (Within 48 hours)

Immediately close all high-leverage positions. This is not advice—it's an order. Data shows current leverage remains high, while the volatility index (BVIV) has fallen from 65% to 51%, indicating the market is "calm before the storm."

• Goal: Reduce leverage to zero, with spot holdings no more than 30% of total assets.

• My action: Reduced personal leverage from 5x to 0, keeping only 25% in spot.

Step 2: Cash is King, but "Quality Cash"

Liquidity is crucial in a crisis, but not all fiat is safe. Prioritize:

9. USD cash (30-40%): in FDIC-insured accounts, not exceeding $250,000 insurance limit.

10. Short-term US Treasury ETFs (20%): maturities under 1 year, highest liquidity.

11. Offshore USD accounts (10%): diversify geopolitical risk.

Avoid small altcoins: altcoins tend to zero in liquidity crises; Luna's collapse in 2022 is a warning.

Step 3: Allocate "Real Safe-Haven Assets"—Silver is Severely Undervalued

Rogers' buy-in on gold is correct, but for retail investors, silver might be a better choice:

• Physical silver shortages are emerging, with industrial demand (solar, electronics) growing 15% annually.

• The gold-silver ratio remains high at 80:1, with a historical average of 60:1—silver is undervalued by 30%.

• Low threshold, high liquidity, small funds can enter and exit flexibly.

Latest data supports this: tokenized silver trading volume surged as silver prices hit record highs, indicating investors are gaining on-chain exposure to silver, aligning with Rogers' risk-averse logic.

Step 4: Keep a "Spark Position" (Optional)

If you believe in crypto's long-term value, retain 5-10% in Bitcoin/Ethereum as a "spark." Principles:

• Cost basis at least 30% below current price.

• Store in cold wallets, hold for 5 years.

• Forget about it until the next cycle.

Ultimate Question: Is Crypto Truly a Safe-Haven Asset?

My answer may disappoint you: in the short term, crypto is a "fighter jet" among risk assets; in the long term, it could be the "Noah's Ark" after the collapse of traditional finance.

Short-term (6-12 months after crisis): All risk assets will be sold off, with crypto leading. Bitcoin may fall below most people's psychological thresholds, possibly back to $50,000 or lower. Stablecoins will face the harshest trust test.

Long-term (3-5 years after crisis): If traditional finance's credibility is wiped out by debt crises, decentralized crypto could become the ultimate safe haven for capital. But this depends on surviving the short-term storm.

As Cantor Fitzgerald's latest report states: "A new crypto winter may emerge in 2026, but it will be more institutionalized and orderly, defined by DeFi, tokenization, and clearer regulation." The winter will freeze out the weak but also clear the battlefield for survivors.

Danger Approaching, but the Game Is Not Over

Rogers' warning is not the death knell but a starting gun. It reminds us: the "deadly bond" between crypto and traditional finance has reached a point where disconnection is necessary, or the entire industry's future will be swallowed by the debt black hole of traditional finance.

Next, I will track three critical indicators daily:

12. US Treasury yield curve (especially the 2-10 year spread)

13. Stablecoin reserve transparency and redemption data

14. 60-day rolling correlation between Bitcoin and US stocks

These data will be updated daily in the comments and will also reflect my position adjustments. Survive to tell a new story in the next cycle.

Do you still have leverage in crypto? Do you think the binding of stablecoins and US Treasuries is the biggest risk? Share your thoughts in the comments!

If you find this article helpful, please like and share it with more crypto friends, so more people can realize the coming storm!

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