The joint report from the Treasury Department and the Office of Management and Budget (OMB) indicates that the U.S. debt-to-GDP ratio was about 97% at the end of fiscal year 2023. According to projections, this ratio will reach 531% by 2098 if current policies continue without... changing. These figures highlight significant concerns about the sustainability of current fiscal policy.

Analysis of the financial situation:

1. High debt-to-GDP ratio:

- Current reality: Reaching a debt ratio of approximately 100% of GDP represents a significant burden on the US economy, as it increases debt service costs and reduces the resources available for government spending on other programs.

- Future outlook: The continued increase in the debt ratio reflects an over-reliance on borrowing to finance the deficit, indicating that the current fiscal policy is not sustainable in the long term.

2. Monetary policy and financial dominance:

- The role of the Federal Reserve: The Federal Reserve uses its monetary tools to deal with inflation and provide financial stability. But with high debt levels, it may have to bear greater financial burdens, affecting its ability to implement effective monetary policies.

Fiscal dominance: refers to a situation in which government spending and fiscal deficits are the primary factor determining monetary policies rather than traditional economic considerations.

The impact of this on digital currencies:

1. Safe haven:

- In times of economic anxiety and uncertainty about the sustainability of traditional financial policies, many investors look to digital currencies such as Bitcoin as a safe haven and store of value. This highlights the attractiveness of digital assets as an alternative to traditional investing.

2. Responding to market fluctuations:

- Inflation and traditional currency: Increased debt levels can lead to inflation if not controlled effectively. Cryptocurrencies, by their non-inflationary nature (such as Bitcoin with its maximum supply), may attract investors looking for protection from the erosion of purchasing power.

- Cryptocurrency Volatility: Although cryptocurrencies are an attractive alternative, they are still highly volatile compared to traditional currencies, which means investors should be careful about the timing of their investments and strategies.

3. Trust in the financial system:

- Systemic challenges: If unsustainable fiscal policies persist, this could erode confidence in the traditional financial system. Cryptocurrencies offer an alternative based on distributed technology and transparency, which enhances trust among users.

Based on the Treasury Department and OMB report, current US fiscal policies appear to be unsustainable in the long term. This situation creates an unstable environment that increases the attractiveness of digital currencies as an investment alternative and a means of hedging against traditional economic risks. However, investors should be aware of the volatility and challenges associated with investing in cryptocurrencies.