According to CoinMeta, by the end of 2025, hedge funds held 7% of tradable U.S. Treasury bonds, with a total market value of approximately $30 trillion. Regulators have warned that the leverage behind these positions could exacerbate volatility in the Treasury bond market. The Financial Research Office of the Treasury Department ( OFR ) stated that its holdings of cash Treasury bonds amounted to $2 trillion, nearly three times what they were five years ago. Hedge funds made net purchases of $87 billion in Treasury bonds in the first half of 2026, with their main strategy being cash-futures basis trading, and they borrowed heavily through repurchase agreements ( repos ). Don Steinbrugge noted that basis trading typically involves leverage of over 20 times, and when volatility increases, lenders may issue margin calls, forcing funds to sell Treasury bonds, which can lead to price declines. A report from the Federal Reserve indicates that hedge fund leverage levels are near historical highs, with this concentration among larger funds. Morgan Stanley estimates that leverage-based trading positions have been reduced by about one-fifth this year, to $1.2 trillion.