The U.S. leveraged loan default rate has remained above 4% for 22 consecutive months, matching the levels seen during the 2008 financial crisis, and it continues to worsen 💥. But this time it's different — it's not a sudden lack of liquidity, but rather companies being squeezed dry of cash flow under prolonged high Intrerest Rate pressure.

Interestingly, this time the pressure mainly impacted private equity, CLOs, and the non-bank credit system, rather than directly hitting traditional banks. However, don't celebrate too early; as the wave of defaults continues to expand, corporate investments, mergers and acquisitions, and capital expenditures will be frozen one by one, and the risk of economic recession will slowly surface.

For the capital market, this means that the pricing of risk assets will become much more selective. Strategies with ample cash flow and stable structured returns are becoming increasingly popular. The AI concept can be supported by sales and financing enthusiasm, but Bitcoin and crypto assets are different—they rely on Liquidity, and a high Intrerest Rate environment and policy changes can directly threaten their existence 💣. Therefore, you will find that the correlation between tech stocks and BTC is becoming stronger; otherwise, the price would have collapsed long ago.