Investors appear to be turning back to Bitcoin (CRYPO: $BTC) amid rising fears that the U.S. dollar will become devalued in the coming months and years.
New figures showing that the U.S. government is more indebted than ever before has raised concerns that the U.S. dollar, the world's reserve currency, could become devalued.
The U.S. Treasury Department announced on July 24 that the federal government's debt stands at an all-time high of $39.7 trillion U.S.
• TokenInsight Q2 2026 Report: TradFi Momentum Lifts MEXC to No. 2 in Commodity Perpetuals
Worse, the U.S. government's debt is growing by $7 billion U.S. each day.
The debt situation in America has reignited the so-called "debasement trade," a bet that the U.S. dollar will fall in value.
In response, many investors are buying limited-supply assets such as Bitcoin, the largest cryptocurrency by market capitalization, and the precious metal gold.
A growing number of economists and market observers are raising the alarm over the swelling U.S. debt, particularly with America mired in a costly war in Iran.
Apollo (NYSE: $APO) Chief Economist Torsten Slok recently warned that the U.S. debt-to-GDP ratio of over 120% means that there is little room to spend more money should a recession hit.
"The U.S. has never entered a recession with this little fiscal buffer," he wrote in a blog post.
A growing number of analysts say that the U.S. debt is triggering demand for assets that fall outside the traditional financial system, such as Bitcoin.
That could bode well for a rebound in the entire cryptocurrency sector, say some analysts.
Bitcoin is trading right around $65,000 U.S. on July 27.