Could Rising US Debt and Shrinking GDP Save Bitcoin (BTC)?
Pro-crypto lawyer John E. Deaton highlighted the potential for rising debt and GDP contraction in the US; This could mean good things for Bitcoin (BTC).
US Economy in Visible Turmoil
As previously seen in a media article from The Washington Post, Deaton outlined how the Congressional Budget Office predicts the national debt will rise to $50.7 trillion over the next decade.
This figure will constitute 122% of GDP, which will be reached by 2034. That’s just over $2 trillion up from February’s $48.3 trillion estimate and equates to 116% of GDP. The metrics reflect a significant increase in debt and a decline in GDP. Unfortunately, the bleak potential of this economic outlook could translate into inflation.
Similarly, the US Bureau of Labor Statistics released the most awaited US Consumer Price Index (CPI) data on June 12. US CPI remained unchanged at 0.3% in May. The market expected inflation to fall to 0.1% for the month. . Despite the increase, annual CPI inflation decreased from 3.4% in the previous month to 3.3% in May.
This data could mean that a breakthrough is lurking for Bitcoin. Many companies in the US are likely to turn to the leading digital currency to hedge against inflation. Several firms have found a way to enter the crypto ecosystem, especially with the emergence of spot Bitcoin ETFs.
BTC Position Backed by Spot Bitcoin ETFs
BlackRock, Fidelity, Grayscale, Bitwise, WisdomTree and a handful of asset management firms launched Bitcoin ETFs almost six months ago. The products are designed to offer institutional and retail investors access to Bitcoin.
Traditional institutional investors such as MicroStrategy and Susquehanna International Group (SIG) are among those adopting BTC directly and through spot Bitcoin ETFs, respectively.
MicroStrategy has a Bitcoin portfolio that has grown over time to hold the largest volume of coins relative to its size. The business intelligence and software firm currently holds more than 214,400 units of Bitcoin. In particular, he still wants to buy more.
In addition to these new investment tools that provide access to Bitcoin, American politicians also showed interest. Republican presidential candidate Donald Trump is accepting Bitcoin and Ethereum as donations for his campaign.
President joe Biden’s campaign team has also adopted this form of donation. All of this could lead to cryptocurrencies, especially Bitcoin, becoming global reserve assets in the long run. The prospect is already visible as Bitcoin price enters recovery mode. It rose by 0.77% in 24 hours to $64,952.37.
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Benjamin Godfrey is a blockchain enthusiast and journalist who enjoys writing about real-life applications of blockchain technology and innovations to ensure mainstream acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain-based media and sites. Benjamin Godfrey is a lover of sports and agriculture. follow him excitementLinkedIn
The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. Neither the author nor the publication accepts any liability for your personal financial loss.
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