Financing debt rises to $1.53 trillion as US investors increase leverage to chase gains

According to Odaily, crypto KOL Phyrex posted on X, stating that US investors are chasing stock market highs with increasingly higher leverage. As of June, the net credit balance of US 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, marking the third consecutive month of growth and setting a new record.

He pointed out that the continued deterioration of the net credit balance means investors’ cash buffers are decreasing and their stock positions are becoming more reliant on borrowing. Currently, leverage in the US market is widespread across the entire brokerage system. During uptrends, as stock prices drive up account net worth, more financing can be released, forming mechanical buying; but once the market weakens, margin pressures may force investors to add cash or sell stocks, turning the previously bullish leveraged funds into mechanical selling. He believes that US stocks are currently facing both high valuations and high financing environments. If the inflow of new capital slows, leveraged positions could further amplify market volatility.