The Congressional Budget Office projected this February 17, 2026, that the US federal debt will reach 64 trillion dollars over the next decade. According to the outlook report from the CBO, this increase will place national obligations at GDP levels not seen since the aftermath of the Second World War.
This fiscal trajectory suggests that the federal deficit, which currently stands at 1.9 trillion dollars, will drastically expand to reach 3.1 trillion by 2036. Consequently, the ratio between debt and gross domestic product will scale from the current 101% to a concerning 120% in just ten years. Despite the nominal magnitude, the market monitors the Treasury’s ability to absorb these mounting obligations without destabilizing the dollar.
A return to debt levels typical of the post-World War era
Given that debt service costs will become one of the most dominant items in the government budget, global investors have begun to reassess the safety of long-term Treasury bonds. Annual net interest payments, according to projections, could consume 2.1 trillion dollars by the mid-2030s as fiscal pressure continues to mount.
The term premium is demanding higher compensation for holding extended sovereign debt, reflecting growing distrust in Washington’s fiscal management. This dynamic pushes yields higher even without rate changes, which significantly increases the national financing cost. It is a “fiscal dominance” scenario where monetary policy becomes subservient to interest payments.
Simultaneously, bearish sentiment against the US dollar has reached multi-year highs, validating the investment thesis in limited-supply assets. While traditional strategies fail, the correlation between macroeconomic uncertainty and interest in Bitcoin strengthens. Investors today are seeking assets that are not liabilities of a sovereign with such an unsustainable debt burden.
Is the bond market the ultimate catalyst for the Bitcoin price?
Under this fragility scenario, the Bank for International Settlements suggests that the growth of stablecoins could temporarily mitigate the pressure on Treasury bills. However, this marginal demand does not solve the structural problem of a nation issuing debt at an accelerated pace. blockchain technology now allows for a rapid exit toward digital liquidity during times of high fiscal volatility.
Diversification toward alternative assets is already visible in IMF data, where the dollar’s share of global reserves recently fell to 56.92%. Therefore, central banks have increased their gold holdings, acquiring 863 tonnes in the last year. This rotation is a signal that traditionally precedes a massive capital entry into digital assets with programmed scarcity.
Unlike the 2020 cycle, the current macroeconomic configuration depends on structural distrust in the reserve currency, not just liquidity. If the bond market demands persistent risk premiums, the political incentive to seek relief through inflation will become inevitable for the White House. Traders must monitor Treasury auctions for signals of a lack of real demand.
The financial future will depend on the system’s ability to absorb these obligations without triggering a massive credibility crisis. It is imperative to observe whether long-term yields begin to reflect risks that exceed current inflationary expectations. If confidence in sovereign paper breaks, the narrative of Bitcoin as the ultimate store of value will no longer be optional.
