The case for Bitcoin grows stronger as the US faces default on $31 trillion debt

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This is an opinion editorial by Robert Hall, a content creator and small business owner.

The United States is facing a potential default on its $31 trillion debt, and the issue is centered around the disagreement between Republicans and Democrats. Republicans want to cut spending to raise the debt limit for a year, while Democrats want a clean debt ceiling bill passed without any conditions.

These two parties have opposing views and no common ground. This has turned into a game of chicken based on who will blink first.

The government has relied on willing participants, such as pension funds and hedge funds, to lend them money by buying treasury bills. However, the current situation is calling into question whether they will continue to do so in the future.

Seriously Broke

If the debt limit is breached and people stop getting paid what is owed to them, people will demand even higher interest rates. The government can’t afford the rates it has now, so what happens if the borrowing cost goes up to 10% or 15%?

The federal government spent a record $475 billion on interest payments in fiscal year 2022, and it’s estimated that interest costs will grow by another 35% this year. This debt spiral is a cause for concern.

We are on a slow-motion collision course with economic reality, and a debt default will change the perception of the U.S. from a trusted payer to a debt junkie unable to pay its debts.

How Is Default Good For Bitcoin?

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The good news about the debt-ceiling situation is that it will drive up the price of bitcoin. As people look for an alternative to U.S. treasuries, some of the money that would have gone into treasuries will flow into bitcoin. New entrants to bitcoin will see that it is a safe haven asset with no counterparty risk and an unchanging supply.

During the debate on the debt ceiling under the Obama administration, the price of bitcoin rose from $13 and ended the year at $755. It even reached a record high of $1,163 that year. Is it a coincidence? Maybe, but it makes sense for people to protect their wealth during times of potential calamity such as a default.

So, I say to the politicians currently running the government: Keep playing these games. Default or do not default because, in the end, it does not matter; you still lose. You have led the world to ruin, and it will be up to Bitcoin to save humanity from itself. The debt-ceiling debacle only accelerates the inevitable.

And to the Bitcoiners: Keep stacking those sats like your lives depend on it because one day they might.

This is a guest post by Robert Hall. The opinions expressed are entirely his own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

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