The abrupt increase in the US government debt by $275 billion in just one day became an alarming signal for many. Uncovering the significance of this debt in the context of Bitcoin’s total market capitalization and its deflationary potential, we ponder the growing concerns about the country’s ability to finance essential services.
An astonishing sum of $275 billion was added to the already enormous national debt of the United States, which stands at $33 trillion. In practice, this means an expenditure of $1,300 for every American – all in one day. In light of these statistics, Bitcoin, with a market capitalization currently at $535 billion, appears as a stable and attractive asset.
According to Jeff Booth, author of “The Price of Tomorrow”, the current global financial situation is not surprising. In his view, thanks to technological progress, especially in the field of artificial intelligence, we should all be wealthier and work less. Paradoxically, the current debt-laden financial system allows for manipulations that have the opposite effect.
Lyn Alden, a macroeconomic analyst, emphasizes that public debt levels relative to GDP in many developed countries, including the US, are the highest since the 1940s. In the past, rising debt levels were offset by decreasing interest rates, which kept debt service costs in check.
The US debt has also been the subject of many heated debates in Congress in recent years. Although politicians were able to find common solutions, today’s significant increase in debt only intensifies concerns about the US’s ability to finance key services.
Nevertheless, such circumstances seem favorable for Bitcoin. As Alden points out, the value of Bitcoin is strongly correlated with global liquidity, especially in recent years when it became a significant macroeconomic asset. She forecasts a rise in the price of Bitcoin, especially when the Federal Reserve will be unable to further reduce its balance sheet in 2024 or 2025.
Despite global concerns about debt, Bitcoin presents itself as a “bridge to the future,” which in the long run might prove to be a stable and attractive investment asset in the face of global economic turbulence.
Photo by Norman Wozny on Unsplash
