The United States’ rising national debt, now exceeding $35 trillion, is raising alarms about the economy’s health.
Analysts suggest that this growing debt could drive greater adoption of Bitcoin as a safe-haven asset.
Matt Bell, CEO of Turbofish, highlighted the potential for Bitcoin in the face of fiat currency devaluation: “The recent news of the US national debt reaching the record high of $35 trillion highlights growing concerns around the sustainability of traditional fiat currencies.
This situation stresses the importance of Bitcoin as ‘hard money’ — a decentralized and deflationary asset that offers a hedge against currency devaluation.”
Investors often turn to safe-haven assets like Bitcoin and gold during times of fiat currency instability to safeguard their purchasing power. Historical trends show Bitcoin’s value rising during periods of financial distress.
According to Bitfinex analysts, the burgeoning US debt could drive Bitcoin prices to new heights as government bonds lose appeal.
They stated, “The US national debt of $35 trillion highlights the importance of Bitcoin as ‘hard money’ and potentially acts as a catalyst for the next upward cycle in Bitcoin […] This may drive investors to seek alternative stores of value like Bitcoin, which is often perceived as a hedge against economic inefficiencies.”
The analysts also pointed out that a significant portion of the current US national debt is linked to inflation and the ease of printing money.
They noted, “Bitcoin can rightly be called one of the only true hard currencies because it’s protected against inflation to a large degree, has a limited supply, is durable due to its digital nature and is increasingly available.”
Crypto analyst Rekt Capital predicted a possible breakout in Bitcoin’s price in September, saying, “Bitcoin is still on track for a September breakout.
History suggests that a breakout from the ReAccumulation Range mere ~100 days after the Halving was always going to be unlikely.”
As of July 31, Bitcoin’s price had risen over 8.3% in the past month, trading just above $66,000, according to Bitstamp data. Despite this increase, Bitcoin remains 10.5% below its all-time high of $73,750.
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