Bitcoin has surged to a record high over the last week as the Federal Reserve grapples with a $40 trillion “ticking time bomb.”
The bitcoin price is hovering around $110,000 per bitcoin, up 50% from its April lows, with traders braced for what could be bitcoin’s biggest week ever.
Now, as a $6 trillion earthquake threatens to shake up the crypto market, the U.S. dollar’s collapse to 2023 lows has sparked “cataclysmic” fears that could be about to send the bitcoin price sharply higher.
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The U.S. dollar has dropped to its lowest since 2023 as fears swirl it could be teetering on the … More
“It is fast becoming a consensus view that the U.S. dollar is on the path to a multi-year decline,” Chris Weston, head of research at Pepperstone, told Reuters.
The U.S. dollar has plummeted to its lowest level since 2023 on fresh tariffs threats from U.S. president Donald Trump and the Senate considers Trump’s “big, beautiful” tax bill that’s expected to propel U.S. debt to $40 trillion over the next decade.
“The ‘big, beautiful bill’ not only won’t make America Great Again, but it continues the destructive fiscal policies that contributed to our fall from greatness,” investor and gold bug Peter Schiff posted to X.
“Ironically, it may be the straw that breaks the camel’s back, ushering in a long overdue dollar and sovereign debt crisis.”
Meanwhile, fears the Federal Reserve will have to step in to prop up the bond market could see the U.S. dollar devalued further, according to investor David Friedberg.
“If you look at the historical perspective when the global reserve currency nation sees their debt sell off it usually is part of a global selloff that happens. It’s not just the U.S. that gets affected. And any one of these markets can cause a cataclysmic follow on to the rest of the global financial markets, like if Japan sells off too much, we are going to start to see a lot of unraveling happening,” Friedberg said during an episode of the All In Podcast.
Speaking alongside Friedberg, fellow podcaster Chamath Palihapitiya said that as uncertainty drives U.S. Treasury bond yields higher, investors will “de-lever” from the United States.
“You’ll sell U.S. debt. You’ll own things like gold and bitcoin. If you’re curious about what’s happening to gold and bitcoin, they started to spike in the last few days. You’ll have ratings organizations that add to this cascade by downgrading the U.S.,” Palihapitiya added, pointing to Moody’s downgrade of U.S. debt last week.
The bitcoin price has rocketed to a fresh all-time high over the last week as fears swirl the U.S. … More
“The spike we’re seeing in yields on 30-year Treasury inflation-Protected Securities (TIPS) [last week] is a particularly concerning sign of waning long-term confidence in the U.S.,” Nic Puckrin, crypto analyst, investor and founder of The Coin Bureau, said in emailed comments.
“And often, these things are a self-fulfilling prophecy, especially considering the vicious circle of rising rates leading to higher borrowing costs for the U.S. government, and therefore a worsening debt rut.”
The nonpartisan Congressional Budget Office estimates Trump’s bill will add $3.8 trillion to the U.S.’s $36 trillion in debt over the next decade, taking it to an eye-watering $40 trillion.
Soaring U.S. bond yields and higher debt have been named as a potential catalyst for a “parabolic” bitcoin price boom.
“The market needs a catalyst for [bitcoin] prices to go parabolic, and while there are many potential catalysts on the horizon, uncertainty still reigns supreme,” Puckrin added.
