The global bond market is on track to reach new heights in 2025, with total issuance surpassing $5.94 trillion, according to Bloomberg. Both sovereign and corporate borrowers have taken advantage of relatively low yields and investor demand, issuing record amounts of debt to refinance obligations and fund fiscal programs.
While this wave of issuance reflects market confidence, it also exposes deeper vulnerabilities. Rising debt levels mean that when interest rates eventually climb again, servicing costs could soar, putting pressure on both governments and companies. Analysts warn that a liquidity squeeze could emerge if investor appetite fades or global growth slows.
In the broader risk landscape, this record borrowing spree sends a mixed signal. On one hand, abundant bond supply means more “safe” assets competing for capital; on the other, it raises concerns over future inflation and potential credit stress — both of which could impact the flow of money into crypto.
Why it matters:
High levels of debt can destabilize markets and reduce global liquidity. For the crypto sector, this could trigger two opposing trends — short-term capital flight from digital assets as yields rise, but longer-term demand for decentralized stores of value if fiat currencies weaken.
