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Rising U.S. debt boosts demand for bitcoin and gold as hedges

CoinDesk says Treasury data puts federal debt at an all-time high of $39.7 trillion, while some observers link the pace to a potential debasement trade.

Reported · Written up by our desk · Market Structure

CoinDesk’s day-ahead crypto market look for July 27, 2026 points to ballooning U.S. debt as a driver of renewed interest in store-of-value assets, with investors weighing bitcoin and gold as potential hedges against dollar devaluation. The outlet cites Treasury’s “Debt to the Penny” dataset, which places federal debt at an all-time high of $39.7 trillion as of Friday, and says some observers estimate the debt is growing by roughly $7 billion each day. It notes that the perceived track toward fiat value erosion is tied to what some market participants describe as a “debasement trade,” which favors limited-supply assets like bitcoin and gold. CoinDesk also references commentary from the founders of LondonCryptoClub, who argue that the debt trajectory supports a fiscal-dominance framework that could shape Fed policy, including keeping rates artificially low and providing liquidity to help fund the refinancing cycle. The newsletter service says the debasement narrative that faded last year could return with greater intensity. The piece adds risk concerns highlighted by Apollo chief economist Torsten Slok, who warned that a U.S. debt-to-GDP ratio above 120% leaves little room for additional spending if a recession hits, and that the Fed may not be able to cut rates as aggressively as in past downturns due to inflation concerns and the impact on bond yields. CoinDesk concludes that in such a scenario, demand for assets outside the traditional financial system, including BTC and cryptocurrencies, could strengthen.

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