US National Debt Hits Record $36.6 Trillion — Could Bitcoin Slide to $95K Amid Recession Fears?
The United States’ gross national debt soared by $367 billion on Monday, reaching an unprecedented high of $36.6 trillion. This surge came shortly after former President Donald Trump signed the “One Big Beautiful Bill” into law on Friday, effectively raising the debt ceiling by $5 trillion. The sudden rise in government borrowing has sparked renewed concern among market participants — and some wonder if it could trigger a Bitcoin correction down to $95,000.
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Red Flags in the US Housing Market
Financial experts, including Kurt S. Altrichter, CRPS and founder of Ivory Hill Wealth, have sounded the alarm on the current state of the US housing market. Altrichter points to a critical economic indicator — the inventory of new single-family homes, which has climbed to nearly 10 months’ worth of supply. Historically, such levels have only been seen during or immediately preceding recessions.
According to Altrichter, while elevated interest rates contribute to the slowdown in housing, the bigger issue is what he refers to as “demand evaporation.” This phenomenon, where buyer interest dramatically drops, mirrors patterns observed before past economic downturns.
If history is any guide, the oversupply in housing could signal more than just a cooling real estate market. It might reflect a broader economic contraction, which typically weighs heavily on risk-on assets such as Bitcoin. Even if digital assets benefit in the long term from fiscal instability, investors often initially react with risk aversion, favoring cash and short-term Treasury bonds over volatile markets.
Bitcoin in the Shadow of Monetary Policy
Another angle fueling the debate is commentary from Jack Mallers, co-founder and CEO of Strike. In a recent post on X (formerly Twitter), Mallers argued that the U.S. Treasury will likely resort to monetary base expansion — essentially printing more money — as the only realistic strategy to manage its ballooning debt. Default, he says, is politically and economically unfeasible, making currency debasement the most probable path.
This, in turn, could lay the groundwork for a Bitcoin rally, as the leading cryptocurrency is often viewed as a hedge against inflation and fiat devaluation.
Fed Policy and Trump’s Influence
While some analysts tie Bitcoin’s recent move above $112,100 to macroeconomic instability, others point instead to Federal Reserve policy speculation. Optimism around potential rate cuts and a softer monetary stance has fueled a rally in both the stock market and digital assets.
Adding to the uncertainty is Donald Trump’s rumored intent to replace Fed Chair Jerome Powell. According to Fox Business, Trump is actively vetting candidates ahead of Powell’s term expiration in May 2026. A more dovish Fed Chair could drastically shift market dynamics, potentially boosting Bitcoin and equities alike.
Correlation with Equity Markets Remains High
Despite bullish sentiment driven by strong inflows into Bitcoin ETFs and growing institutional interest, BTC’s price action remains tightly coupled with the broader equity market. The correlation between Bitcoin and the S&P 500 currently stands at 68%, indicating shared price behavior between the two asset classes.
This synchronicity introduces new risks, particularly from ongoing U.S. import tariffs, which could pressure corporate earnings — especially in tech sectors heavily reliant on global supply chains.
One prominent example is Nvidia (NVDA), which recently became the world’s most valuable company with a market cap of $4 trillion. However, Nvidia’s reliance on international trade leaves it vulnerable to geopolitical frictions. Should trade tensions escalate, tech stocks could face significant headwinds — dragging Bitcoin down with them.
Outlook: Recession vs. Rally
While the raised debt ceiling may signal short-term optimism for risk assets, the looming threat of a recession creates uncertainty. In such an environment, Bitcoin could potentially retrace to $95,000, especially if investor sentiment turns defensive.
Still, long-term forecasts remain optimistic. Jack Mallers believes a new all-time high for Bitcoin in 2025 remains likely — particularly as macroeconomic pressures intensify and faith in fiat currencies continues to erode. But for now, traders are watching the tech sector and AI-driven companies closely, gauging their resilience in the face of global challenges.
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Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.
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