US Debt May Become Bitcoin's Biggest Catalyst, Forecasts Suggest $300,000 by 2029

Bernstein has projected Bitcoin (BTC) to reach $150,000 by mid‑2027 and $300,000 by 2029, basing its outlook on the impact of U.S. government debt rather than the traditional halving cycle.

Why U.S. Debt Is Seen as a Catalyst

The United States officially surpassed $40 trillion in debt in August, a level that has more than doubled over the past decade. Bernstein analysts, led by Gautam Chhugani, contend that the era of falling interest rates is ending, and each rise in yields expands deficits and borrowing. They expect Washington to allow the dollar to lose value rather than cut spending, a scenario that could boost demand for assets with fixed supply, such as Bitcoin and gold.

Recent Market Moves

On August 19, Treasury Secretary Scott Bessent doubled long‑dated bond buybacks from $2 billion to $4 billion per operation. The 30‑year yield, which had peaked at 5.337 % (its highest since 2007), later fell to 5.17 %. The move was interpreted as a signal of easier monetary conditions, prompting Bitcoin to jump roughly 10 % within hours, moving from the mid‑$60,000s to about $81,200 before settling near $78,200.

Institutional Activity

ETF flows are reflecting the “debasement trade,” where investors seek stores of value amid expectations of currency dilution. BlackRock’s Bitcoin fund (IBIT) and the gold fund (GLD) re‑entered the top‑10 most‑traded ETFs, displacing some semiconductor funds that had dominated the list during the AI‑driven rally.

Crypto‑Industry Perspective

Arthur Hayes, chief investment officer at Maelstrom, echoed the debt‑driven narrative, suggesting that continued money printing could lift Bitcoin to $250,000 without a financial crisis. He highlighted the March 2023 Federal Reserve backstop after the Silicon Valley Bank collapse, which saw Bitcoin rise from near $20,000 to its 2025 record.

Risks and Market Sentiment

CryptoQuant data shows that long‑term Bitcoin holders sold into the recent rally as prices approached $80,000. At the same time, U.S. spot Bitcoin ETFs recorded their strongest weekly inflows in ten months, indicating fresh demand that could offset selling pressure.