The U.S. national debt topped $40 trillion as of Aug. 18, 2026, more than double its 2017 level, even as Bitcoin fell 28% over the trailing 12 months. Fidelity Digital Assets research ties Bitcoin's price to swings in the global money supply, though that link recently turned negative.
The Treasury Department said the national debt was running at over $40 trillion as of Aug. 18, 2026, more than double its level in 2017. Yet Bitcoin (CRYPTO: BTC) has not moved in lockstep with that figure: its price fell 28% in the 12 months through Aug. 27, 2026, even as the debt pile kept climbing.
The deficit is outgrowing the economy
The total debt figure matters less than the debt-to-GDP ratio, which weighs the pile against the economy's ability to repay it. The Congressional Budget Office projected in February 2026 that this year's deficit would reach $1.9 trillion, or 5.8% of GDP. It also estimated that debt held by the public will reach 101% of GDP this year, and 120% by 2036 if the trend holds.
As that share grows, lenders demand higher yields to offset the rising risk of default, which makes the problem worse over time. The government has a few ways out: grow the economy faster than the debt, cut spending, raise taxes, or inflate the currency to shrink the debt's real value. That last option is where Bitcoin enters the picture.
Bitcoin's inflation-hedge case is uneven
Bitcoin's 21 million coin supply cap makes it a candidate for an inflation-resistant asset, a concept tied to money supply growth, since more dollars in circulation cannot produce more Bitcoin. Research by Fidelity Digital Assets in March 2026 found that expansion of the global money supply could explain as much as 87% of Bitcoin's price variation over the prior 15 years.
But that relationship has not held steady. An Aug. 13, 2026, follow-up report from Fidelity found that the rolling 24-month correlation between Bitcoin and the global money supply had turned negative. The Motley Fool's Alex Carchidi argues the odds still favor Bitcoin becoming a decent inflation hedge again, since its scarcity is programmed to increase over time.
Source: The Motley Fool
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