Record US Debt Sparks Bitcoin Bullish Predictions

The US federal debt has surged to an unprecedented $37 trillion, fueling speculation that Bitcoin could reach $132,000 by year-end. This milestone follows President Trump's July 4 signing of the One Big Beautiful Bill Act, which aimed to cut $1.6 trillion in spending yet coincided with accelerating deficit growth.

Monetary Policy Shifts Loom

Analysts warn the swelling debt may force the Federal Reserve to resume quantitative easing — a policy of large-scale bond purchases that expands money supply. Bitget's chief analyst Ryan Lee notes Bitcoin's 【925%】 surge since 2020 directly correlates with the 【38%】 debt increase, stating: "Servicing this debt will require massive cash injections, creating ideal conditions for Bitcoin's scarcity narrative."

——The more fiat dilutes, the stronger Bitcoin's value proposition becomes——

M2 Money Supply Correlation

Real Vision analyst Jamie Coutts projects Bitcoin could hit $132,000 based on historical correlations with M2 growth. His model suggests every dollar of new money supply could drive disproportionate BTC appreciation. This aligns with BitMEX co-founder Arthur Hayes' more aggressive $250,000 prediction should the Fed implement full-scale QE.

Inflation Hedge Dynamics

The debt surge coincides with renewed corporate Bitcoin adoption, raising concerns about potential Treasury Department intervention. However, market participants increasingly view BTC as a hedge against currency debasement — a trend accelerated by the debt's $10.3 trillion expansion since 2020. Notably, Elon Musk recently criticized fiscal policies that could push the annual deficit to $2.5 trillion.

As monetary expansion continues, cryptocurrency markets appear poised for volatility. Whether Bitcoin reaches six figures remains debated, but its role in the global financial system continues evolving amid unprecedented fiscal challenges.