Bitcoin has surged to a new record high over the past week amid growing concerns over the Federal Reserve’s management of a looming $40 trillion debt crisis. The cryptocurrency’s price now hovers around $110,000 per bitcoin, marking a 50% increase since its April lows. Traders are preparing for what could be Bitcoin’s most significant week yet.
The crypto market faces a potential $6 trillion upheaval as the U.S. dollar collapses to its lowest levels since 2023, sparking fears of a “cataclysmic” shift that could push Bitcoin prices even higher.
Chris Weston, Head of Research at Pepperstone, told Reuters, “It is fast becoming a consensus that the U.S. dollar is on a path toward a multi-year decline.”
The dollar’s recent plunge follows renewed tariff threats from President Donald Trump and ongoing Senate deliberations over Trump’s so-called “big, beautiful” tax bill. This legislation is expected to increase U.S. debt to $40 trillion over the next decade. Investor and gold advocate Peter Schiff criticized the bill on social media platform X, stating, “The ‘big, beautiful bill’ won’t make America Great Again. Instead, it continues the destructive fiscal policies that caused our fall from greatness. It may be the straw that breaks the camel’s back, ushering in a long-overdue dollar and sovereign debt crisis.”
Investor David Friedberg warns that the Federal Reserve may need to intervene to support the bond market, which could lead to further devaluation of the U.S. dollar. Speaking on the All In Podcast, Friedberg explained, “Historically, when the global reserve currency nation faces a debt sell-off, it triggers a global market sell-off. It’s not just the U.S. that is affected. If other major markets like Japan also sell off, we could see widespread financial unraveling.”
Joining Friedberg, podcaster Chamath Palihapitiya noted that rising U.S. Treasury bond yields amid uncertainty will drive investors to “de-lever” from U.S. assets. “Investors will sell U.S. debt and turn to assets like gold and Bitcoin. If you’re curious why gold and Bitcoin have spiked recently, it’s due to this shift,” Palihapitiya said. He also referenced last week’s Moody’s downgrade of U.S. debt as a factor accelerating this trend.
As the U.S. faces mounting debt and weakening currency, Bitcoin’s surge highlights growing investor demand for alternative stores of value in uncertain economic times.
