The post US national debt surges to $38.5 trillion. Here’s what it means for bitcoin appeared on BitcoinEthereumNews.com.

The crypto market isn’t alone in climbing this new year — the US national debt is soaring too. The national debt has risen to $38.5 trillion, the highest amount the country has ever owed to domestic and foreign lenders, according to debt dashboards. Over 70% of the national debt is owed to domestic lenders, while the rest is owed to overseas lenders, led by Japan, China, and the United Kingdom. The raw number isn’t the whole story; it’s how it stacks up against the economy. The US GDP, which is the total value of everything produced in a year, sits closer to $30 trillion, equating to a debt-to-GDP ratio of over 120%. Think of it like your personal debt: borrowing $120 for every $100 you earn yearly. This climb stems from big spending during the coronavirus pandemic and decades of fiscal spending on infrastructure, the military, and social programs. Interest payments alone now top $1 trillion annually, more than defence spending. What does it mean for BTC? The implications for BTC and other assets, such as gold, are generally seen as bullish because of how authorities typically respond to such high levels of indebtedness. It’s common for governments to pressure central banks to lower interest rates to keep debt-servicing costs low. It’s not surprising that President Donald Trump has repeatedly called for the Fed to lower rates rapidly to 1% or lower. Low rates typically bode well for BTC, gold, and overall risk sentiment. Recently, prominent U.S. officials, including former Treasury Secretary and Federal Reserve Chair Janet Yellen, said that mounting debt could prompt the Fed to keep rates low to minimize interest costs, rather than control inflation, in a move called fiscal dominance. As indebtedness rises, the government has to borrow more, and lenders demand a higher yield (interest rate)…

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Filed under: News - @ January 6, 2026 8:27 am