America's public debt increased by 1,000 billion USD in 48 days: Opportunity for the crypto market?

Just two months after Elon Musk criticized the way the Trump administration handled the public debt issue, a new report shows that the United States has added another 1 trillion USD in federal debt in just 48 days.

The current deficit spending is the biggest macro factor but is often overlooked. Bitcoin, Ethereum, and DeFi are no longer just speculative investments; they are increasingly becoming tools for hedging against a fracturing financial system.

The issue of spending, not just interest rates

The debt is increasing by an equivalent of 21 billion USD each day, highlighting what analysts and investors like Elon Musk have warned about before, that the fiat money system is trapped in an unsustainable path and digital assets could be a risk hedge.

Musk has emphasized that the newly signed One Big Beautiful Bill Act is a factor exacerbating the already alarming deficit.

Since August 11, the US public debt has surged by an additional 200 billion USD, bringing the total debt close to 38 trillion USD.

In just July, Washington recorded a deficit of 291 billion USD, the second largest in the history of July. Since the beginning of fiscal year 2025, the deficit has reached 1.63 trillion USD, an increase of 7.4% compared to the same period and is likely to exceed 2 trillion USD.

Government spending currently accounts for 44% of GDP, a level not seen since World War II and the financial crisis of 2008.

Although the Federal Reserve (Fed) still talks about a soft landing, the underlying numbers tell a harsher story. Budget revenue has only grown slightly at 2.5% annually, while spending last month increased by nearly 10%.

Experts from Kobeissi Letter state:

"This is a spending issue, not an interest rate issue. This is a spending crisis."

Source: Kobeissi LetterThis comment indicates that the annual deficit will remain in the trillions of USD even if the Fed cuts interest rates.

Impact on the crypto and financial markets

The bond market has signaled a warning, as investors demand higher yields for U.S. Treasury bonds. Recent auction sessions have exceeded 5%, a level rarely seen in modern history.

High-interest refinancing is increasingly burdening financial pressure. In the short term, high yields may attract liquidity away from risk assets, but in the long term, deficit spending will erode confidence in the USD, which will benefit Bitcoin and other digital assets with a fixed supply.

Source: Kobeissi LetterMany investors call Bitcoin "digital gold" and this argument becomes stronger as the fiat money system reveals its weaknesses. Experts warn:

"With the current fiscal path, there is a 100% certainty that the United States will default in the long term."

In the eyes of the crypto community, the massive public debt trend of the U.S. is evidence that decentralized assets can protect investors from the government's poor management.

With a debt level nearing 38 trillion USD and an annual deficit of over 1.5 trillion USD, the risk that policymakers will have to "print money to pay off debts" is increasing – a scenario that is extremely favorable as Bitcoin has a limited supply.

Not only Bitcoin, but altcoins can also benefit indirectly as large institutions seek alternative channels to low-yield bonds.

Stablecoins and tokenized bonds have attracted capital flows, but in the long run, liquidity may flow into the broader crypto market.

What happens next depends on whether the U.S. Congress can rein in spending or not ( the chances are quite low in the election year ) and how the Fed will balance interest rate policy amid public debt pressure. However, both paths carry significant risks.

Vincent