Two months after Elon Musk criticized the Trump Administration's handling of the national debt, reports indicate that the United States has added another trillion dollars in federal debt in just 48 days.
The increase translates to around $21 billion per day. It highlights what analysts and investors like Elon Musk have warned before, that the fiduciary system is trapped on an unsustainable path, and digital assets may be the hedge.
In retrospect, Elon Musk particularly pointed to the recently signed One Big Beautiful Bill Act as crucial for further amplifying an already alarming deficit.
However, since August 11, U.S. debt has increased by $200 billion, bringing the national total closer to $38 trillion.
Washington recorded a deficit of $291 billion just in July, the second largest for any July on record. Deficits are at $1.63 trillion for fiscal year 2025, a 7.4% year-on-year (YoY) increase, and on track to exceed $2 trillion.
Similarly, government spending has exploded to 44% of GDP, a level only seen during World War II and the financial crisis of 2008.
While the Federal Reserve (Fed) still insists on a soft landing, the underlying numbers tell a harsher story. Revenues are barely growing at 2.5% annually, while spending increased nearly 10% last month.
Bond markets are already showing warning signs. Investors are demanding higher yields for U.S. Treasury Bonds, with recent auctions exceeding 5%, a rarity in modern history.
As debt refinancing accelerates at higher rates, the fiscal hole deepens. This presents a rather technical outlook for stocks, commodities, and especially cryptocurrencies.
In the short term, higher yields may drain liquidity from risk assets. However, in the long run, persistent deficit spending erodes trust in the fiduciary. This trend has historically benefited Bitcoin and fixed-supply digital assets.
While cryptocurrency traders often frame Bitcoin as digital gold, the case strengthens when fiduciary regimes demonstrate fiscal unsustainability.
For many in the crypto sector, the trajectory of U.S. debt validates the thesis that decentralized assets offer protection against poor sovereign fiscal management.
With $38 trillion in debt looming and deficits locked above $1.5 trillion annually, the temptation for future policymakers to inflate obligations grows. That risk is bullish for Bitcoin's scarcity narrative.
Altcoins could also benefit indirectly as institutional allocators explore alternatives to Treasury Bonds with reduced yields.
Stablecoins and tokenized Treasury Bonds are already absorbing capital, but the liquidity overflow may eventually extend to broader crypto markets.
What happens next depends on whether Congress controls spending (unlikely in an election year) and how aggressively the Fed balances rate policy with debt sustainability. However, either path carries risks.
