US Debt Hits $40 Trillion as Bitcoin, Gold and Copper Rally
Original title: US National Debt Hits $40 Trillion: Is This The End For The Dollar?
6:55
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Summary
US national debt crossed $40 trillion on 19 August 2026, more than doubling in a decade. Bernstein analyst Gautam Chhugani argues four decades of falling interest rates are over. In his view, every rise in bond yields forces more borrowing, creating a compounding feedback loop. On 19 August 2026, US Treasury Secretary Scott Bessent doubled long-dated Treasury buybacks, days after the 30-year yield hit its highest level since 2007. Bitcoin rose 10% past $72,000 within hours, and $1.74 billion in short positions were liquidated, the second largest event of its kind on record. Gold posted its strongest month since 1999 in the same window, while copper reached an all-time high. BlackRock's Bitcoin ETF and the GLD gold fund both re-entered the ten most traded ETFs, displacing semiconductor funds that had dominated the list all summer. The debasement trade is the bet that governments will dilute their currency rather than cut spending, pushing money into assets that cannot be printed. CryptoQuant on-chain data shows long-term BTC holders sold into the rally all the way to $80,000, while US spot BTC ETFs recorded their strongest week of inflows in ten months. That leaves a tug of war between old coins leaving and new ETF money arriving.
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Key points
- US national debt crossed $40 trillion on 19 August 2026, having more than doubled in a decade.
- Bernstein analyst Gautam Chhugani argues four decades of falling interest rates are over, and that every rise in bond yields forces more borrowing in a compounding feedback loop.
- US Treasury Secretary Scott Bessent doubled long-dated Treasury buybacks on 19 August 2026, days after the 30-year yield hit its highest level since 2007.
- Bitcoin rose 10% past $72,000 within hours of the announcement, and $1.74 billion in short positions were liquidated, the second largest event of its kind on record.
- Gold posted its strongest month since 1999 in the same window, copper reached an all-time high, and BlackRock's Bitcoin ETF and the GLD gold fund both re-entered the ten most traded ETFs.
- CryptoQuant on-chain data shows long-term BTC holders sold into the rally all the way to $80,000, while US spot BTC ETFs recorded their strongest week of inflows in ten months.
Chapters
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Questions
What is the debasement trade?
It is the bet that governments will dilute the value of their own currency rather than cut spending, so money moves into assets that cannot be printed.
What did Scott Bessent do on 19 August 2026?
The US Treasury Secretary doubled long-dated Treasury buybacks, days after the 30-year yield hit its highest level since 2007.
Has this pattern happened before?
Yes. When Silicon Valley Bank collapsed in March 2023, the federal backstop loosened financial conditions. Bitcoin was at $20,000 and went on to hit an all-time high the following year.
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