$40 Trillion Debt Threshold Sparks Gold and Bitcoin Surge
US public debt surpassed $40 trillion for the first time on August 19, 2026, according to the US Treasury. Just days later, gold prices rallied and the dollar sank, while Bitcoin ETFs recorded their strongest inflow month of 2026.
The debasement trade is a key driver behind these moves, where investors buy assets that governments can't print, such as gold and Bitcoin, due to concerns about the long-term purchasing power of the currency. This trade isn't just about inflation expectations, but rather the risk that fiscal math eventually forces easier monetary policy.
Gold has been a clear winner in this trade, with prices gaining 5% in the week after the buyback announcement and reaching a record 289 tonnes purchased by central banks in the second quarter of 2026. Bitcoin's story is more complicated, with spot ETFs bleeding $4.5 billion in early 2026 but reversing the trend sharply in August.
Consumers are also voting with their savings, with US crypto ownership rising from 20% to 22% between 2024 and 2025, and roughly 562 million people now holding some form of digital asset globally. Stablecoins show a similar pattern, with supply growing over 50% in 2025.