Investors Turn to Bitcoin and Gold as U.S. Debt Hits $39.7 Trillion

Investors are shifting capital into bitcoin and gold as a hedge against the devaluation of the U.S. dollar, a trend driven by record-level national debt. Data from the United States Department of the Treasury released July 24 shows federal debt reached an all-time high of $39.7 trillion, with the total increasing by approximately $7 billion every day.

This environment has revived the debasement trade, where market participants purchase limited-supply assets to bet against the decline of fiat currency. This shift occurs alongside high government spending linked to conflict in Iran. Bitcoin was trading around $65,000 on July 27.

Torsten Slok, the chief economist at Apollo Global Management, warned that the U.S. debt-to-GDP ratio now exceeds 120%. Slok stated that this level leaves the government with a historically small fiscal buffer to address a potential recession.