Bitcoin has stabilized after a sudden price drop this week, although "extreme fear" is threatening to cause further problems .
Now, as Federal Reserve chairman Jerome Powell warns of a "critical period," bitcoin prices are bracing for the possibility that the U.S. budget deficit will increase 27% next year, to 1 $.9 trillion - which some say could support bitcoin's price.
Michael Novogratz, chief executive officer of crypto-focused financial services firm Galaxy Digital, told CNBC that: "Until governments stop spending like drunken sailors ... it's a no-go." bitcoin as a core investment makes the most sense in the world to me," adding that both former president Donald Trump and president Joe Biden "were the two worst presidents in terms of increasing debt in our country's history".
Biden is facing increasing calls for him to resign and make way for a new Democratic Party candidate to run against former president and Republican front-runner Donald Trump this week. This.
The odds of Biden dropping out of this year's White House race suddenly spiked in the past few days to 62% on cryptocurrency-based prediction platform Polymarket .
Last month, Treasury Secretary Janet Yellen issued a dire warning about the massive $34 trillion U.S. public debt that some say could push bitcoin's price to $1 million in 18 months next.
According to a recent analysis by the Congressional Budget Office, U.S. debt interest payments are expected to reach $870 billion this year, after rising inflation prompted the Federal Reserve to increase Interest rates are at unprecedented levels in the aftermath of massive spending and money printing during the Covid period.
The Congressional Budget Office added this month that the US budget deficit is expected to increase 27% next year, to $1.9 trillion.
Earlier this year, Bank of America analysts warned that the US debt burden was about to grow by as much as $1 trillion every 100 days - potentially fueling a surge in bitcoin prices .
"The US national debt is growing by $1 trillion every 100 days," Michael Hartnett, chief strategist at Bank of America, wrote in a note to clients seen by CNBC, adding that "it's no surprise that 'debt discount' deals are approaching all-time highs".
The newly formed bitcoin exchange-traded funds (ETFs) that have been shaking up Wall Street over the past month are on track to have a "boom year," in part because of the collapse of the U.S. dollar, Hartnett predicts.
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