US Treasury assets face scrutiny over gold revaluation and hedge fund debt holdings

Hedge funds are estimated to hold approximately $2 trillion in US Treasuries as of late 2025, representing about 7% of the marketable government debt outstanding. Much of this involves basis trading, which exploits price differences between Treasuries and futures. Research from the Dallas Fed suggests that traders may increasingly shift toward swap spread trading as an alternative, which requires holding fewer physical Treasuries to maintain similar risk levels.

Separately, discussions regarding the potential revaluation of US gold reserves have surfaced. While the US holds the world's largest gold reserve—valued at over $1 trillion at current market prices—its official book value remains at approximately $11 billion due to a 1973 statutory price. Fidelity Investments' Jurrien Timmer warned that attempting to revalue these reserves to fund government spending could backfire, potentially damaging the US dollar and increasing term premiums on Treasury yields. Treasury Secretary Scott Bessent has previously denied plans to revalue the gold reserves.