Coin Bureau|30. Aug.
The Financial System Is BREAKING. Bitcoin Isn’t.
The U.S. Debt Crisis Escalates
- U.S. public debt has reached $40 trillion – two years ahead of forecasts.
- Net interest payments amount to roughly $3 billion per day, expected to hit $2.1 trillion by 2036.
- The deficit already stands at $1.8 trillion in ten months, despite no recession.
- Treasury Secretary Scott Bessent doubled buyback operations for long-term bonds to at least $4 billion per operation.
- Goal: Curb yields on 30-year bonds, which hit a 19-year high of 5.33%.
- The move is a band-aid: The Treasury cannot print money, so it funds buybacks by issuing more short-term debt – akin to paying a mortgage with a credit card.
- Market experts call it “rearranging deck chairs on the Titanic” or a step toward covert yield curve control.
- Japan, the largest foreign creditor, is reducing its Treasury holdings.
- Reason: The Bank of Japan raised rates to 1%, making domestic bonds more attractive than FX-hedged U.S. paper.
- Japanese insurers hold $96 billion in unrealized losses on domestic bonds.
- The July yen intervention provided only temporary relief – the trend is reversing.
- Firms like Coreweave, Oracle, and others are piling on record debt for AI infrastructure, some at junk bond levels.
- Moody’s warns of deteriorating credit quality at Microsoft, Amazon, Meta, and Alphabet.
- Chips in new data centers lose 50% of value within three years, but loans stretch over 30 years.
- Key question: If AI fails to deliver promised productivity gains, the entire buildout and global economy face serious risk.
- Historically, Bitcoin moved in lockstep with the NASDAQ (correlation up to 0.96). In early 2026, it fell 33% while tech gained 24%.
- Now the correlation is collapsing: The 20-day correlation with tech ETFs dropped to 0.58.
- Bitcoin rallied 25% in a month despite bond market chaos, while the NASDAQ rose just 0.89%.
- Institutional inflows into U.S. spot ETFs hit $1 billion in three days (Aug 17–19).
- Reason for decoupling: Investors see Bitcoin as an alternative to the broken financial system – no central authority, fixed supply of 21 million coins.
- All problems (debt, rate pressure, AI financing) are results of human decisions by bureaucrats and central banks.
- Bitcoin operates without authority or agenda – it is becoming “digital gold” as the traditional system strains.
- Whether this is a lasting regime change or just a temporary rotation remains to be seen.
