US Debt Soars, Surpassing Half of Bitcoin’s Market Cap in a Single Day
The US added a staggering $275 billion to its national debt in a single day, surpassing half of Bitcoin’s market capitalization.
Key Takeaways
- US national debt skyrockets, adding $275 billion in just one day, totaling $33.44 trillion.
- The daily debt addition surpasses half of Bitcoin’s market cap, equivalent to 10 million BTC.
- Interest payments on US debt projected to escalate to 4% of GDP by 2030.
- Debt-to-GDP ratio alarms rise, with predictions indicating federal debt might reach 181% of GDP by 2053.
National Debt
In an alarming turn of economic events, the US has witnessed its national debt surge by a staggering $275 billion in a mere 24 hours, pushing the total to a record-high of $33.44 trillion. This increment, when juxtaposed with the cryptocurrency realm, is more than half of Bitcoin’s market cap, equivalent to approximately 10 million BTC, and surpasses the entire market cap of Ethereum, which stands below $200 billion.
Bitcoin enthusiast, Samson Mow, pointed out this astronomical rise in comparison to Bitcoin’s market cap, emphasizing the magnitude of the debt increase. He noted, “That’s equivalent to about 10 million BTC. And with these figures in front of us, there are still skeptics questioning if $27k is a worthy Bitcoin purchase point.”
Debt-to-GDP Ratio Surging
To put things further into perspective, the debt accumulated by the US in the past two weeks averages at an unsettling $32 billion daily. This pace, if sustained, would lead to an addition of a trillion dollars in debt within a month – a rate that has doubled from previously reported figures of $14 billion daily additions.
In a single day, the US added more than half of #Bitcoin’s entire market cap in debt. That’s something like 10 million @BTC. And yet there are still people that are unsure if $27k is a good price to buy. pic.twitter.com/RMxdzB01yL
— Samson Mow (@Excellion) October 4, 2023
Goldman Sachs analysts forecast the cost of servicing this colossal debt to set unprecedented records by 2025. Factors like Federal Reserve’s interest rate hikes over the past year are intensifying the expenses tied to this debt.
In terms of the Debt-to-GDP ratio, the government spent approximately 2% of the national GDP in 2022 to service its debt. However, estimates indicate this percentage rising to 3% by 2024 and potentially 4% by 2030. The Peter G. Peterson Foundation projects the US will expend a total of $10.6 trillion over the next decade just on interest for this growing national debt. Alarming projections from the Congressional Budget Office hint at the national debt-to-GDP ratio accelerating, possibly reaching a staggering 181% by 2053.
As the debt ceiling remains unconstrained until January 2025, these daunting figures might become an unsettling norm for the nation.
Conclusions
The rapid accumulation of national debt and its increasing juxtaposition with the crypto market cap provides a vivid representation of the challenges faced by the traditional financial system. The juxtaposition also highlights the growing significance and acceptance of cryptocurrencies. While the debt figures are undoubtedly alarming, it also underscores the need for comprehensive economic reforms, transparent fiscal policies, and possibly the consideration of alternative financial systems or models, like decentralized finance, which might provide more sustainable solutions in the long run.
