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US Debt Hits $38.5 Trillion—Here's Why That's Bullish For Bitcoin And Gold

Benzinga · 4d ago

Bitcoin (CRYPTO: BTC) and gold are rallying even as U.S. debt hit a record $38.5 trillion—fueling bets that Washington will lean on the Fed to keep rates low, a setup that historically lifts hard assets.

Debt Hits $38.5 Trillion

U.S. national debt crossed $38.5 trillion on Monday, pushing the debt-to-GDP ratio above 120%.

Interest payments alone now top $1 trillion annually, exceeding defense spending. The surge stems from pandemic-era stimulus and decades of fiscal expansion on infrastructure, military, and social programs.

Over 70% of the debt is owed to domestic lenders, with the rest held by Japan, China, and the United Kingdom.

The $17.3 Trillion Oil Wildcard

President Trump’s military action against Venezuela has added fuel to the macro debate.

The U.S. may have gained access t Venezuela’s oil reserves, which at 303 billion barrels are the largest proven reserves in the world.

At $57 per barrel, those reserves are worth $17.3 trillion—more than the entire GDP of every country except the U.S. and China.

Even if sold at half the market rate, that’s $8.7 trillion, enough to wipe out nearly a quarter of U.S. national debt.

Read Also: Venezuela Aftermath: Bitcoin and Crypto Markets Soar Amid $17.3 Trillion Oil Price Shock

Why Bitcoin And Gold Are Rallying

Ballooning debt forces governments to pressure central banks into keeping rates low to minimize interest costs—a dynamic called fiscal dominance.

Trump has repeatedly called for the Fed to slash rates to 1% or lower.

Low rates typically boost Bitcoin, gold, and risk assets.

Gold, as measured by (NYSE:GLD) already surged 60% in 2025 on currency debasement fears, and analysts expect Bitcoin to catch up in 2026.

The U.S. yield curve has steepened, with long-duration bond yields rising while short-duration yields stay depressed.

This signals the Fed may have to step in as a buyer of last resort and monetize the country’s debt, which erodes the dollar’s purchasing power and drives demand for alternative stores of value.

“This configuration, combined with a structurally weaker dollar, rewards assets with real or defensive characteristics,” analysts at Bitfinex said.

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