U.S. financing debt rises to $15.3 trillion, investors leverage to chase higher returns

Crypto KOL Phyrex posted on platform X, stating that American investors are chasing stock market highs with increasingly high leverage. As of June, the net credit balance of U.S. brokerage accounts fell by approximately $70 billion in a single month, dropping to negative $1.061 trillion, a historic low. During the same period, margin debt increased by about $86 billion to $1.53 trillion, rising for the third consecutive month and setting a new record.

He pointed out that the continued deterioration of the net credit balance means that investors have less cash buffer and are increasingly reliant on borrowing for stock positions. Currently, leverage in the U.S. market is widespread throughout the brokerage system. In an upward phase, rising stock prices can further release financing limits after boosting account net worth, creating mechanical buying pressure; however, once the market weakens, margin pressure may force investors to add cash or sell stocks, turning the leverage that previously drove the rise into mechanical selling pressure. He believes that the U.S. stock market is currently facing both high valuations and a high financing environment, and if new funds slow down, leveraged positions may further amplify market volatility.