US Debt Hits $40 Trillion, Dollar Value Concerns Fuel Gold and Bitcoin Rally

The U.S. national debt has surpassed $40 trillion for the first time, sparking concerns about the dollar's value. The Treasury Department responded by expanding its program to repurchase older government bonds, aiming to maintain market liquidity and orderly functioning.

Gold prices surged more than 3% in two days following the announcement, while Bitcoin climbed approximately 13%. These gains reflect renewed interest in non-dollar assets amid speculation about dollar weakness, a dynamic known among investors as the 'currency debasement trade.'

Despite some volatility, gold remained up over 10% for August and has seen a significant year-to-date increase of around 27%. Bitcoin also posted its strongest monthly gain since November 2024, breaching $80,000 at one point.