The US national debt reached $39.68 trillion at the Treasury's 23 July close, setting another record driven by persistent federal deficits and rising refinancing costs. The debt has grown by roughly $3.2 trillion over the past year, with daily increases running between $7 billion and $10 billion, while annual interest expense approaches $1 trillion - now exceeding the roughly $947 billion defense budget. This trajectory has revived investor arguments for Bitcoin and gold as hedges against dollar devaluation, a thesis backed by figures including Ray Dalio and JPMorgan analysts who frame both assets as a 'debasement trade.' The case rests on the view that mounting debt and low real rates erode currency value, though Bitcoin and gold prices have both declined significantly in 2026 despite the debt's continued climb.
US Debt Reaches $39.68 Trillion with $1 Trillion Annual Interest Cost
Total public debt outstanding stood at $39.68 trillion at the Treasury's 23 July close, according to the Debt to the Penny dataset. The debt has grown by roughly $3.2 trillion over the past year, with daily increases running between approximately $7 billion and $10 billion depending on the measurement window.
Federal interest expense is running near $1 trillion a year, about $3 billion a day, which now exceeds annual defense spending of roughly $947 billion. Roughly a third of Treasury debt matures within twelve months and must be refinanced at today's rates, per the Treasury's Monthly Statement of the Public Debt, rather than the sub-2% average that prevailed in early 2022.
Investors Frame Bitcoin and Gold as Debasement Hedge
Ray Dalio has spent the past year urging investors toward gold and bitcoin, warning that the US "spends 40% more than it takes in" against a debt roughly six times its income. JPMorgan analysts have grouped bitcoin and gold together as the "debasement trade" and argued bitcoin looks undervalued relative to gold within it. Citadel's Ken Griffin has described investors trying to "de-dollarize" their portfolios against US sovereign risk.
The founders of LondonCryptoClub told CoinDesk that the debasement trade "was a popular narrative last year but has gone quiet," and they expect it to "go into overdrive." The logic is that persistent deficits and a debt that can only be refinanced at scale force policymakers toward low real rates and ample liquidity, conditions that erode the currency and favor scarce assets.
Bitcoin and Gold Prices Decline Despite Record Debt Levels
Bitcoin traded around $65,000 on Monday, roughly 48% below its 2025 peak near $126,000. Gold sat near $4,080 an ounce, about 27% below its January record above $5,590. Both assets have spent much of 2026 falling, not rising, even as the debt set record after record.
A more hawkish Federal Reserve and a firmer dollar lifted real yields for stretches of this year, which pressures non-yielding assets like gold and bitcoin regardless of the fiscal picture. Monday's moves were driven less by the debt print than by easing US-Iran tensions pulling oil lower and cooling inflation fears ahead of the Fed's meeting this week.
FAQ
What is the current level of US national debt?
The US national debt reached $39.68 trillion at the Treasury's 23 July close, according to the Debt to the Penny dataset. The debt has grown by roughly $3.2 trillion over the past year, with daily increases running between approximately $7 billion and $10 billion.
Why are investors discussing Bitcoin and gold as hedges against US debt?
Investors including Ray Dalio and JPMorgan analysts have framed Bitcoin and gold as a "debasement trade," arguing that persistent federal deficits and mounting debt force policymakers toward low real rates and ample liquidity - conditions that erode currency value and favor scarce assets. Dalio has warned that the US "spends 40% more than it takes in" against a debt roughly six times its income.
How have Bitcoin and gold prices performed in 2026?
Bitcoin traded around $65,000 on Monday, roughly 48% below its 2025 peak near $126,000. Gold sat near $4,080 an ounce, about 27% below its January record above $5,590. Both assets have declined in 2026 despite the debt setting record after record, as a more hawkish Federal Reserve and firmer dollar lifted real yields and pressured non-yielding assets.
