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View my earnings and portfolio details. Follow me to learn investment tips. The US national debt has surpassed the historic high of 37 trillion US dollars, and 25% of federal tax revenue is used to pay interest on the debt. This astonishing figure has triggered deep concerns in the market about inflation rebounding, financial stability, and the long-term value of the US dollar. In this context, investors are beginning to wonder: Can cryptocurrencies, especially Bitcoin and stablecoins, become new safe-haven assets?
#### How Does the Debt Crisis Affect the Crypto Market?
1. Inflation Concerns Drive Funds to Inflation-Resistant Assets
- High debt levels may force the Federal Reserve to maintain loose monetary policy, or even restart quantitative easing (QE), thereby increasing the risk of dollar devaluation.
- Bitcoin ($BTC), due to its fixed supply (21 million coins), is often regarded as 'digital gold' and may attract more capital inflows to hedge against inflation.
2. Dollar Credit Impairment, Stablecoin Demand May Rise
- If market confidence in the US dollar declines, investors may turn to stablecoins (such as USDT, USDC) as short-term safe-haven tools, especially in cross-border transactions and decentralized finance (DeFi).
3. Risk Assets Under Short-Term Pressure, But Long-Term Benefits for Crypto?
- If the debt crisis triggers an economic recession, it may lead to stock market and bond market turmoil, dragging down risk assets such as Bitcoin in the short term.
- However, if the Federal Reserve is forced to cut interest rates or implement new stimulus policies, abundant liquidity may eventually push up cryptocurrency prices.