According to BlockBeats, Reuters quoted market observers as saying that concerns about the rapid rise in US government debt are part of the reason for the recent surge in gold and Bitcoin prices. The US budget deficit has expanded to $1.7 trillion in fiscal 2023 and is expected to reach $2.6 trillion by 2034. US public debt is expected to reach 106% of GDP in 2028, up from 97% in fiscal 2023. Since $5 trillion in 2007, the size of US debt has soared to $27 trillion.
The growing U.S. government debt has attracted more attention, and interest payments have also accounted for a larger proportion, sometimes even exceeding defense spending. This worsening trend has driven demand for Bitcoin and gold, which are often used as a hedge against inflation and the decline in the purchasing power of the dollar. Lawrence H. White, an economics professor at George Mason University, believes that the interest in Bitcoin and gold also stems from the increasing turbulence of inflation.
In addition to hedging risks, the rise in Bitcoin prices is also affected by the launch of new ETFs and the upcoming halving event. Gold hit a record high thanks to expectations of interest rate cuts by central banks and the need to diversify foreign reserves. However, Nicholas Colas, co-founder of DataTrek Research, said that multiple indicators in the current Treasury market show that bonds have not yet reflected expectations of a worsening fiscal outlook. Investors still view the US dollar as a reserve currency and US Treasuries as relatively safe assets.
