Credit markets flash warning signs that could spill into crypto

The Kobeissi Letter says put option open interest across four large US credit ETFs has reached a record 11.5 million contracts, doubling over the past 12 months and topping the 10 million seen in the 2022 bear market. The ETFs include HYG, JNK, LQD and BKLN, and the pace of hedging signals rising unease among institutional investors.

Credit spreads are widening. Tech high-yield spreads jumped to 556 basis points, exceeding April 2025 highs and marking the widest levels since October 2023, while broader high-yield spreads sit at 361 basis points—the highest since November 2025—leaving tech junk bonds trading at roughly a 195 basis-point premium to the rest of the market.

Pressure is visible beyond the US: the iTRAXX Europe Crossover climbed nearly 11 basis points to about 270, with the Main near 57, and Asian investment-grade dollar bond spreads widened to seven-month highs.

United States

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