The US national debt set another record this month, and it has revived an argument that had gone quiet: that the surest hedge against a government borrowing without limit is an asset the government cannot print.
CoinDesk’s markets daybook led on Monday with record federal debt as the force pushing investors toward bitcoin and gold to shelter from dollar devaluation. The case rests on a trajectory that is unusually easy to see coming and on a narrative, the so-called debasement trade, that is old, well-funded, and currently being made louder than it has been in months. What it is not, yet, is visible in the price.
The Debt Trajectory Is the Whole Argument
The number itself is the starting point. Total public debt outstanding stood at $39.68 trillion at the Treasury’s 23 July close, according to the Debt to the Penny dataset, and it sets a fresh record on most business days.
What makes it a macro story rather than a headline is the pace. Debt has grown by roughly $3.2 trillion over the past year, and the daily increase has run somewhere between about $7 billion and $10 billion depending on the window measured. At the current pace, gross debt crosses $40 trillion within a few months rather than years, though issuance is not linear and the exact timing will move.
The more revealing figure is what the debt now costs to carry. Federal interest expense is running near $1 trillion a year, about $3 billion a day, which now exceeds annual defense spending of roughly $947 billion. The debt has reached the point where servicing it is itself a major driver of further borrowing.
The pressure is concentrated in what has to be rolled over. Roughly a third of Treasury debt matures within twelve months and must be refinanced at today’s rates, per the Treasury’s Monthly Statement of the Public Debt, rather than the sub-2% average that prevailed in early 2022. That refinancing wall is the concrete link between the fiscal picture and the low-real-rate conditions the debasement argument depends on.
The Argument Being Made, and Who Is Making It
The thesis is not fringe. Ray Dalio has spent the past year urging investors toward gold and bitcoin, warning that the US “spends 40% more than it takes in” against a debt roughly six times its income. JPMorgan analysts have grouped bitcoin and gold together as the “debasement trade” and argued bitcoin looks undervalued relative to gold within it. Citadel’s Ken Griffin has described investors trying to “de-dollarize” their portfolios against US sovereign risk.
The logic is that persistent deficits and a debt that can only be refinanced at scale force policymakers toward low real rates and ample liquidity, conditions that erode the currency and favor scarce assets. As the founders of LondonCryptoClub put it to CoinDesk, the debasement trade “was a popular narrative last year but has gone quiet,” and they expect it to “go into overdrive.” That candid admission that the trade faded is the tell that this is a case being argued rather than a trend in motion.
Investor Takeaway
The debt trajectory is the most predictable part of the thesis. The link from debt to bitcoin’s price is the contested part, and it should be read as an argument, not a mechanism.
Why the Price Doesn’t Yet Reflect It
Here, the argument meets an inconvenient market. Bitcoin traded around $65,000 on Monday, roughly 48% below its 2025 peak near $126,000. Gold sat near $4,080 an ounce, about 27% below its January record above $5,590. Both hedges have spent much of 2026 falling, not rising, even as the debt set record after record.
The reason is that debt is not the only macro variable. A more hawkish Federal Reserve and a firmer dollar lifted real yields for stretches of this year, which pressures non-yielding assets like gold and bitcoin regardless of the fiscal picture. Monday’s moves were driven less by the debt print than by easing US-Iran tensions pulling oil lower and cooling inflation fears ahead of the Fed’s meeting this week. The debasement trade is a long-horizon bet on the currency, and long-horizon bets can be underwater for a long time before they resolve.
That is the honest shape of it. The debt trajectory is real and compounding, the argument for owning hard assets against it is coherent and backed by serious names, and the price action has so far declined to cooperate. What would tell you the trade is actually activating is narrow and specific: real 10-year yields turning down while the debt keeps climbing, since that is the exact condition and currency is being debased faster than it is being compensated the thesis rests on.
As long as real yields hold firm, as they have for much of this year, the debt can set record after record and the hedges can keep drifting. The macro case compounds either way. Whether it pays depends on which of those two forces moves first.
Investor Takeaway
Both hedges being below their highs while debt sets records is the core tension. It argues the debasement trade is a thesis awaiting a catalyst, not one already working.
