This week, the U.S. federal government debt exceeded $35 trillion for the first time in history, raising concerns among investors about the health of the economy. Matt Bell, CEO of Turbofish, believes this could catalyze the mass adoption of Bitcoin. Analysts point out that Bitcoin prices are expected to break out of the range in September and reach a new peak.
Bell said that Bitcoin is a safe-haven asset, which is very important. He told the cryptocurrency media CoinTelegraph: "Recent news that the U.S. national debt has reached a record high of $35 trillion highlights people's concerns about the sustainability of traditional fiat currencies."
He continued: “This situation demonstrates the importance of Bitcoin as ‘hard money’, a decentralized and deflationary asset that can serve as a hedge against currency depreciation.”
During periods of fiat currency devaluation, investors often seek safe-haven assets like Bitcoin and gold to help protect their purchasing power. Historically, Bitcoin’s price has risen when the traditional financial system is struggling.
The growing U.S. national debt could push Bitcoin prices to new all-time highs. Bitfinex analysts mentioned that since a large portion of U.S. government spending is used to repay debts rather than the production sector, the reduced attractiveness of government bonds will benefit Bitcoin prices.
"The $35 trillion U.S. national debt highlights the importance of Bitcoin as 'hard currency' and could be a catalyst for the next leg of Bitcoin's gains, which could prompt investors to seek alternative stores of value like Bitcoin, which is often seen as a hedge against economic inefficiencies," the analysts said.
The analysts added that the looming debt crisis could be avoided if the dollar was a "hard currency" whose supply was not infinite.
“A large part of the reason for the current U.S. national debt is inflation, the depreciation of the dollar against other currencies, and the ease with which any government can print any amount of money,” the analyst explained.
“Bitcoin can be called one of the only true hard currencies as it is largely resistant to inflation, has a limited supply, is durable due to its digital nature, and is increasingly ubiquitous.”
Well-known crypto analyst Rekt Capital said that the price of Bitcoin may break out of the current range in September.
He mentioned: “Bitcoin is still expected to break out in September, and history shows that the possibility of breaking out of the re-accumulation range only about 100 days after the halving has always been low.”
Bell went on to say that the breakthrough could be catalyzed by growing concerns about the traditional financial system. He added: “As more individuals and institutions recognize the limitations of the current financial system, we could see an increase in the adoption of Bitcoin and other cryptocurrencies.”
He concluded: “This growing awareness and adoption can indeed be the catalyst for the next leg up in the Bitcoin cycle. As Bitcoin becomes a more integral part of the global financial landscape, its value will continue to rise.”
