Are you sure you want to exist?
MTrading Team • 2023-10-24

How Bitcoin Can Interfere with the U.S. Debt Crisis

How Bitcoin Can Interfere with the U.S. Debt Crisis

The U.S. government will have to inflate its way out of the $33 trillion debt. Bitcoin can unexpectedly become the force to interfere with the crisis.

With the FED’s historical hike cycle, all market participants are concerned about the U.S.'s enormously growing national debt. It has already suppressed $33 trillion with 22-year high rates in the background. Major experts wonder how much will the servicing of the debt cost. Goldman Sachs economists say it is going to make a new record by the end of 2025.

What’s more, the bank believes the interest rate will grow in 2024 and 2030 to reach 3% and 4% of GDP accordingly compared to 2% last year. In simpler words, we are about to see the continual spiral happening. From a funding perspective, it seems like the U.S. government is about to find itself in quite a challenging situation.

Industry-best trading conditions
Deposit bonus
up to 200% Deposit bonus 
up to 200%
from 0 pips Spreads 
from 0 pips
Awarded Copy
Trading platform Awarded Copy
Trading platform
Join instantly

As a result, most key market players go short on their U.S. Treasury holdings. China is on the top list of sellers. Otherwise, the country will face a tougher hand funding process. What we see now is China trying to dump U.S. treasuries although the greenback is still the dominating force. Nevertheless, fewer people will be eager to purchase U.S. government debt considering growing inflation. The main problem here is that the FED will do its best to mask real inflation.

Meanwhile, bonds and other assets will inevitably be affected. Investors start seeking higher yields to the difference between what they have projected and the real inflation rate.

Bitcoin as the Game Changer

BTC may turn out to be an equalizer. Crypto appears to be a tangible alternative to the US dollar, despite the greenback being considered a least of bad fiat currencies. So, BTC has all the chances to alter the game.

With its $500 billion market value, it looks quite promising from a growing perspective. Experts predict a big move coming up. Within a decade, crypto may become a normalized saving asset. In 2-3 decades, we might see a massive global adoption of Bitcoin that would change the way people operate their funds.

May the trading luck be with you!