Debasement Trade Reboot: US Debt Hits $40 Trillion as Bitcoin Trades Near High

The US government's debt has surpassed $40 trillion, and yet Bitcoin is trading near its previous high of $80,000.

This seems counterintuitive to the debasement trade narrative, which suggests that rising debt and weaker fiat money should make scarce assets more valuable.

However, analysts at BloFin argue that the trade has entered a new phase, with investors now focusing on government attempts to control borrowing costs rather than just money creation.

The bond market's reaction to this shift is crucial, as rising long-term yields can reflect growing concern over government debt and fiscal sustainability. If policymakers intervene to support the debt market, it could lead to a more aggressive response from the Fed, potentially benefiting Bitcoin.