The rise of the US national debt to $7 trillion with such a level of interest payments (25% of tax revenues) is a worrying signal for the global economy. This situation has deep implications and may impact the crypto markets as follows:
1. Threat of a debt crisis and dollar devaluation
Fact: The higher the debt payments, the less funds the government has for social needs, investments, and defense.
Risk: The US may begin to monetize debt (printing money through the Fed), which will increase inflationary pressure.
Reaction: Investors may start looking for a hedge against fiat instability, which will increase interest in BTC as "digital gold."
Probable effect: + for BTC, especially in the long term.
2. Growing interest in stablecoins
Reason: In conditions of instability, many are moving to digital dollar assets (USDC, USDT) as "digitized cash."
But: If trust in the dollar weakens due to budget deficits and debt, even stablecoins are at risk, especially centralized ones.
Probable effect:
Short-term — growing popularity of stablecoins,
Long-term — possible shift to decentralized stablecoins (DAI, crvUSD, Ethena).
3. Overall blow to risky assets
With increased fiscal pressure, the Fed may keep rates higher for longer to curb inflation.
This will lead to:
Rise in bond yields,
Capital outflow from risky assets: stocks, altcoins, and crypto startups.
Probable effect: - for altcoins and DeFi, if they do not prove their resilience.
What "smart money" is doing:
Funds and institutional investors are already increasing their share of BTC and ETH in portfolios as a hedge against monetary instability.
Examples:
Metaplanet (Japan) buys BTC through bonds;
Fidelity and BlackRock are launching ETFs and DeFi platforms;
Central banks are increasing gold and currency reserves — BTC becomes a digital equivalent.