The US national debt has exceeded $34 trillion for the first time in history. Since 2014, American debt has increased by 100 percent.
In June 2023, the US government's debt ceiling was suspended until 2025 and since then the debt has already increased by $3 trillion (~10 percent).
What does this development mean for Bitcoin (BTC)?
Congratulations to everyone. We just reached another milestone in U.S. federal debt.
$34,001,493,655,565.48 to be exact. pic.twitter.com/6LsOPfd7BS
— James Lavish (@jameslavish) January 2, 2024
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America's Debt in Perspective
To provide context and perspective on America's debt, let's compare it to that of some major economies.
For example, the current US national debt of $34 trillion is higher than that of the entire economies of China, Germany, Japan, India and the United Kingdom combined, reports the Peter G. Peterson Foundation.
The US government currently spends $2 billion a day on interest costs. Additionally, debt per resident has reached $101,000 and debt per taxpayer has reached $264,000.
What is the U.S. government's long-term plan to address this issue? Since 2020, $11 trillion has been added to the mountain of debt. That's an increase of 48 percent in the last four years.
There is no cap on America's debt all year long, and with the election approaching, President Joe Biden may want to appease the population with some new relief packages.
What does this mean for the Bitcoin price?
For the Bitcoin price, that's almost just one bullish see development. This means that the American government will have to borrow enormously to maintain its current mountain of debt.
In addition, the country has to pay more and more interest costs and therein lies the problem.
These rising interest costs lead to growing budget deficits and therefore need to borrow even more.
Ultimately, this will come at the expense of the US dollar and people will then look for other forms of scarcity, where Bitcoin could be a key candidate as an endpoint.
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