US debt nears $40 trillion in 5 months, boosting Bitcoin case

The U.S. national debt is set to cross $40 trillion within weeks, its fastest trillion in history in five months, sharpening Bitcoin's macro hedge case.

Bank of America's chief equity strategist Michael Hartnett projects the debt will reach $50 trillion by July 2029, reinforcing his "Anything But Bonds" stance as interest payments on the debt total $1.4 trillion over the past year, according to Investing.com.

The Treasury's "Debt to the Penny" data shows total public debt at $39.91 trillion as of Aug. 12, about $86.5 billion short of the milestone, with $32.18 trillion held by the public and $7.73 trillion in intragovernmental holdings. The government posted a record July deficit of $432.3 billion, with net interest on the debt adding $104 billion to outlays. For the first 10 months of fiscal 2026, net interest payments reached $931 billion and the cumulative deficit hit $1.799 trillion, already exceeding the full fiscal 2025 shortfall of $1.775 trillion. The debt now exceeds 124 percent of GDP, nearing the post-World War II peak.

The fiscal deterioration strengthens Bitcoin's case as a hedge against fiat devaluation, a narrative reinforced by the 30-year Treasury auction that drew a yield of 5.22 percent, the highest since August 2001. The Treasury estimates net marketable borrowing needs of about $739 billion for the fourth quarter of fiscal 2026, up $68 billion from its May estimate, keeping long-term rate pressure and the macro case for Bitcoin in focus.

Fiscal Deterioration Puts Fiat Devaluation in Focus

Robert Kiyosaki, author of "Rich Dad Poor Dad," said on X that people holding cash savings are "the biggest losers" as the debt approaches $40 trillion, and argued silver is more attractive than gold in August 2026. He cited forecasts from Jim Rickards suggesting silver could reach $200 an ounce and gold $10,000 an ounce.

The macro backdrop has pushed investors toward assets that hedge against currency erosion. Hartnett's framework for the 2020s also includes "Anywhere but China," "Anything But the Dollar," and "all-in on AI," tracing the lack of market anxiety to a widespread belief that policymakers would intervene to shield growth and equities.

For Bitcoin, the transmission runs from widening deficits and rising yields to fiat devaluation concerns, which historically support flows into hard assets. The Treasury's elevated borrowing needs through the fourth quarter keep the yield curve and dollar under pressure, a dynamic that crypto-native investors watch as a tailwind for BTC. With the debt-to-GDP ratio approaching levels last seen after World War II, the structural case for non-sovereign assets grows as the cost of financing the federal balance sheet climbs.

This article is for informational purposes only and does not constitute investment advice.