US debt tops $40T stoking debate on what it means for Bitcoin

Analysts say the $40 trillion debt milestone could bolster Bitcoin’s long-term case, even as Treasury yields, dollar strength and liquidity remain key near-term drivers.

As US federal debt tops $40 trillion for the first time, there is renewed debate over whether mounting government borrowing could strengthen Bitcoin’s case as a scarce, non-sovereign asset.

Interest costs have also climbed, surpassing Medicare to become the federal government’s second-largest budget expense behind Social Security in the first 10 months of fiscal 2026, according to Reuters.

The debt milestone coincided with a Treasury move to calm a bond selloff that’s pushed long-term yields to their highest levels since 2007. Treasury Secretary Scott Bessent said Wednesday the department would double buybacks of 10- to 30-year debt to at least $4 billion per operation, initially pushing yields and the US dollar lower as Bitcoin (BTC) and gold rallied.

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