US Debt Tops $40 Trillion: What It Means for Bitcoin Price

US federal debt has officially surpassed $40 trillion for the first time, reigniting debate among analysts over whether mounting fiscal pressure could strengthen Bitcoin's long-term thesis as a scarce, non-sovereign store of value. According to Reuters, interest costs on the debt have climbed so sharply that they now exceed Medicare spending, making debt servicing the federal government's second-largest budget expense behind Social Security in the first 10 months of fiscal 2026.

The debt milestone coincided with a coordinated Treasury intervention aimed at calming a bond selloff that had pushed long-term yields to their highest levels since 2007. Treasury Secretary Scott Bessent announced Wednesday that the department would double its buybacks of 10- to 30-year debt to at least $4 billion per operation. The move initially pushed yields and the US dollar lower while Bitcoin and gold rallied, with BTC trading around $72,600 on Thursday morning — up roughly 6% over 24 hours and 15% over the past week, according to CoinGecko data.

Market analysts remain divided on the debt's implications for crypto. TrendLabs founder and chartered market technician JC Parets argued that the Treasury's bond-buyback expansion signals an effort to push back against rapidly rising long-term rates, a dynamic that "can change the math for everything else investors own, including Bitcoin." Bloomberg and others also linked part of the rally to optimism over friendlier US crypto policy following President Donald Trump's White House meeting with industry executives. Bitunix analyst Dean Chen offered a more cautious view, noting that while buybacks temporarily weakened the dollar, persistent deficits and growing financing needs could eventually drive borrowing costs higher again, making the dollar's strength, Treasury yields and inflation expectations the key near-term variables for BTC.

Analysts at DeFi protocol Yield Basis took the longest view, telling Cointelegraph that continued US debt growth could structurally boost demand for Bitcoin as a hard-money alternative. Adding to the bullish backdrop, spot Bitcoin ETFs recorded $189 million in net inflows as August totals approach $1 billion, signaling sustained institutional appetite even as macro uncertainty persists.