Worsening US debt outlook seen more in gold and bitcoin than in bonds
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Concerns about the rapidly rising U.S. government debt is driving surges in gold prices and bitcoin. The U.S. budget deficit widened to $1.7 trillion in 2023 and is projected to reach $2.6 trillion by 2034. U.S. government debt held by the public is on pace to reach a record 106% of GDP in 2028. The unchecked growth of U.S. government debt is gaining more attention as payments also take a larger bite of the government's budget. The worsening trajectory has boosted interest in bitcoin and gold as a hedge against the depreciating purchasing power of the U.S. currency. The rising debt and deficit are expected to lead to policies including yield curve control to prevent a debt crisis. Treasury market indicators show that bonds are not pricing in a worsening fiscal outlook. Treasury investors still see the dollar as the reserve currency and Treasuries as relatively safe. Bitcoin has been buoyed by new exchange-traded funds (ETFs) and is approaching a halving. Gold surge is driven by expectations of central bank cuts and purchases by foreign central banks diversifying their reserves. The worsening U.S. fiscal situation remains a key driver for some investors.

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https://m.economictimes.com/markets/cryptocurrency/worsening-us-debt-outlook-seen-more-in-gold-and-bitcoin-than-in-bonds/articleshow/109439946.cms