The dollar is floating in a debt ocean, and while the United States’s economic future is debated between deficits and promises of growth, Bitcoin (BTC) appears as a lighthouse in the eyes of the residents of the American nation, to illuminate the road in turbulent times. On this, the journalist Natalie Brunell and the Bitcoin market analyst Sam Callaham talked, in a meeting that analyzed the current economic challenges of the country, focusing on fiscal policy, inflation and role of decentralized digital currency.
Callaham explained that the United States travels a period of fiscal domain, in which government spending and debt (which exceeds 2 billion dollars annually) promotes the economy more than the traditional tools of the Federal Reserve (FED). Unlike previous times, such as the 1970s, when monetary policy managed to control inflation, today Public debt (120% of GDP) limits its effectiveness. «Upload interest rates no longer cools the economy; Expand the deficit by increasing the cost of debt service, ”he said.
Structural deficits, aggravated by programs such as Social Security and Medicare – which represent 61% of federal expenditure – are The main inflationary engine. Callaham stressed that the interest payment of the debt exceeded in 2023 the expenses in defense and health, placing itself as the second budget item. «Fed faces a dilemma: lowering rates could rekindle inflation, but keeping them drowning public finances,» he warned.
Reducing spending is a political chimera. Social programs, together with the defense (26% of discretionary spending), are untouchable due to their electoral impact. In addition, the US economy, highly financed, depends on asset prices (actions, properties) to generate tax revenues. «Cutting the expense could collapse those prices, further reducing income,» Callaham explained. Even Mass layoffs in the public sector would save only 200 billion dollarsa minimal fraction of the deficit.
The economic situation in which the United States is found was recognized in December by Elon Musk, who showed his concern about the growing budget deficit. «The United States is heading towards a very fast de facto bankruptcy,» said the businessman at that time, a few days after the inauguration of Donald Trump from the presidency of the North American country.
Now, Musk is leading the Government Efficiency Department (Doge), which was created by President Trump. This will focus on areas such as the simplification of administrative processes, the review of public contracts and expenses for Eliminate waste. However, the nation continues to generate concern after reaching critical levels that could put its economic stability at risk.
If an insolvency situation was reached, the repercussions would be serious, including a significant increase in unemployment, uncontrolled inflation and a generalized loss of confidence in financial markets.
An unstable economic environment and uncertainty would be pushing more people to consider bitcoin as an alternative or reservation of value compared to the volatility and potential devaluation of the dollar.
The elements that promote the adoption of Bitcoin in the United States
- Government spending and debt: de facto bankruptcy would be at doors.
- Inflation: it continued to rise as time passes.
- The ineffective monetary policy: the increase in interest rates does not cool the economy.
- The Federal Reserve dilemma: lowering rates could rekindle inflation, but keeping them drowning public finances.
- Difficulty in reducing spending: reducing spending could collapse the price of essential assets for the US economy.
Bitcoin: Essential savings technology
Before the panorama described above, Bitcoin emerges as a key tool. Callaham defined it as a «savings technology» that, by offering a fixed offer asset (21 million units), protects against monetary erosion.
In an environment of persistent inflation, real assets such as Bitcoin are essential. Its growing adoption and asymmetric profile (high potential, low risk) make it unique, ”Callaham argued. In addition, he stressed his role in promoting productivity. This, by allowing long -term savings that encourage investment in innovation, which is key to economic growth.
Although it does not rule out a recession, Callaham is cautiously optimistic. Before a crisis, he anticipates that the FED would inject liquidity, benefiting assets such as Bitcoin. However, it warns that inflation would range between 3 and 4%, harming bonds and effective. «Retirees with bond wallets are at risk. Diversification towards alternative assets is urgent, ”he said.
The conversation paints a future in which fiscal policy and technological innovation collide and intertwine. While the deficits and debt challenge stability, Bitcoin is postulated not only as a refuge, but as a catalyst for a deep economic change. In Callaham’s words: «The solution is not to print more, but in rethinking how we save and invest. There resides the true resilience ».
Bitcoin’s adoption is in Turbo mode in the United States
- Institutional investment: Companies such as Microstrategy (now Strategy) and banks such as US Bank are buying large amounts of Bitcoin, a sign that institutions and corporations are seeing the digital currency as a reserve or investment asset.
- Bitcoin ETF: interest in funds quoted in Bitcoin stock is increasing, allowing institutional and retail investors to have exposure to the digital currency, without having it directly.
- Bitcoin as a form of payment: some companies, shops and even cities, as Detroit, are accepting BTC as a payment method.
- Regulation and legislation: The growing legislative and regulatory attention towards Bitcoin and cryptocurrencies, including efforts to classify or regulate them, also suggests greater adoption and recognition.
- Bitcoin strategic reservations movement: More than 20 states consider the creation of Bitcoin strategic reserves. This while Donald Trump’s government also evaluates a treasure in BTC. The movement reflects a growing recognition of Bitcoin as a potentially valuable and stable asset.