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Investors are increasingly turning to assets like bitcoin BTC$65,094.85 and gold as protective measures against the potential devaluation of the U.S. dollar, driven by the alarming rise in federal debt.
As of last Friday, the Treasury's "Debt to the Penny" report indicated that the national debt has reached an unprecedented level of $39.7 trillion. Analysts suggest that this debt is escalating at a staggering rate of approximately $7 billion per day. If this were considered market capitalization, it would position the U.S. debt as the 16th-largest cryptocurrency, surpassing many privacy-focused coins.
The creators of the crypto newsletter LondonCryptoClub have noted that this rapid growth supports what is known as the debasement trade, which involves investing in finite assets like gold and bitcoin that typically gain value when fiat currencies depreciate amid high government debt levels.
"This scenario of fiscal dominance will ultimately shape Federal Reserve policy. Interest rates will likely need to remain artificially low, and liquidity must be maintained to facilitate refinancing," the founders stated to CoinDesk. They added, "While the 'debasement' narrative was prevalent last year, it has quieted down, but we anticipate it will gain momentum again soon!"
Concerns regarding the surging debt have been voiced by various experts in recent months.
Torsten Slok, chief economist at Apollo, cautioned that the U.S. debt-to-GDP ratio exceeding 120% leaves minimal capacity for additional spending in the event of a recession. Additionally, he pointed out that the Federal Reserve's ability to reduce interest rates aggressively during a downturn is limited, as this would exacerbate inflation and diminish bond yields. The government must issue more bonds to cover deficits, which must yield higher returns to attract buyers.
"The U.S. has never faced a recession with such a limited fiscal cushion,” he remarked in a blog entry in May.
Consequently, if a recession does occur, it may lead to prolonged economic distress and an increased demand for assets like bitcoin and cryptocurrencies that operate largely outside conventional financial systems. However, it is worth noting that since its launch in 2010, bitcoin has behaved more like a tech stock rather than a traditional safe-haven investment.
Currently, bitcoin is trading just above $65,000, buoyed by a recent drop in oil prices. Ether is outperforming bitcoin, suggesting a potential rally for alternative cryptocurrencies in the near future.
Stay alert!
Read more: For insights on today’s altcoin activities and derivatives, check out Crypto Markets Today. For a full schedule of this week’s events, see CoinDesk's "Crypto Week Ahead."
What’s trending
- Bitcoin is back above $65,000 as U.S. and Iran hold fire. Oil drops 5% (CoinDesk): Risk-on trades are returning as the U.S. and Iran ease tensions, leading to a drop in oil prices. Bitcoin has risen above $65,000, and ether has climbed to nearly $1,950, with other major cryptocurrencies also showing gains.
- U.S. and Iran pause fighting to give peace talks ‘space.’ Here’s where negotiations stand (CNBC): A temporary ceasefire following two weeks of conflict between the U.S. and Iran appears to be holding, although negotiations for a lasting peace face new challenges.
- Cloud data firm Storj files for Chapter 11, extending a week of crypto failures. Token slides 16% (CoinDesk): Storj Labs, a decentralized cloud network, has filed for Chapter 11 bankruptcy, marking the fourth crypto entity in a week to announce a closure or winding down as investor focus shifts towards AI.
- Chipmaker CXMT vaults to top of China's valuation with 466% surge in Shanghai debut (Reuters): Shares of CXMT Corp. skyrocketed 466% on their debut in Shanghai, following Asia's largest IPO this year, propelling the chipmaker to the forefront of China's stock market valuation despite a recent tech stock selloff.
Today’s signal
The ether-bitcoin ratio is rising. (TradingView)The chart illustrates daily fluctuations in the ether-bitcoin (ETH-BTC) ratio in candlestick format.
This ratio has surpassed both the 100- and 200-day simple moving averages for the first time since the onset of the bear market earlier this year.
The current trend indicates strengthening momentum for ether in comparison to bitcoin.
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Crypto Flows, Share and the Selective Rotation
Crypto Flows, Share and the Selective Rotation
Markets have shifted since June, with Binance maintaining approximately 55% of user funds and 24% of spot trading, attracting net inflows in early July while the broader market experienced outflows.
By CoinDesk ResearchJul 22, 2026Markets have shifted since June, with Binance maintaining approximately 55% of user funds and 24% of spot trading, attracting net inflows in early July while the broader market experienced outflows.
Why it matters:
Markets have shifted since June, with Binance maintaining approximately 55% of user funds and 24% of spot trading, attracting net inflows in early July while the broader market experienced outflows.
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