US Debt Surpasses $40 Trillion, Fueling Debate on Bitcoin's Value
The US federal debt has surpassed $40 trillion for the first time, sparking debate about its potential impact on Bitcoin's value. The milestone coincided with a Treasury move to calm a bond selloff by doubling buybacks of long-term debt.
According to CoinGecko data, Bitcoin is trading at around $72,600, up 6% over the past 24 hours and 15% over the past week. Some analysts attribute the rally to optimism over friendlier US crypto policy, while others point to Treasury buybacks as a potential catalyst.
TrendLabs founder JC Parets said bond-market participants viewed the increased purchases of longer-term government bonds as an effort to push back against rising long-term rates, which could change the math for investors and make Bitcoin more attractive. However, not all analysts agree, Bitunix analyst Dean Chen pointed out that persistent deficits and growing financing needs could eventually push borrowing costs higher again.
Analysts at DeFi protocol Yield Basis took a longer-term view, suggesting that continued growth in US debt could strengthen demand for Bitcoin as a hedge against currency debasement due to its fixed supply and lack of a sovereign issuer. They noted that concerns around fiat currency debasement will likely increase the appeal of Bitcoin as a protective instrument.