Forbes warns: Bitcoin may be the biggest beneficiary under the pressure of $39 trillion debt

Compiled by AidiDiaoJP, Foresight News

Original title: Forbes: The US $39 trillion debt “crisis” may trigger a sharp rise in Bitcoin

Bitcoin has soared by 30% since the US went to war against Iran (two huge shocks are currently hitting the Bitcoin price).

However, the price of bitcoin is still far from reaching its all-time high of $12.6 million in 2025, even though US Secretary of Defense Pete Hugseth said China is secretly hoarding bitcoin.

Now, as traders prepare for the “upcoming” White House Bitcoin move, legendary billionaire Ray Dario warns that the US dollar is falling and on the verge of collapse — at the same time, J.P. Morgan analysts predict a large-scale rotation of capital from gold to Bitcoin.

The US dollar is suffering from continued depreciation, and some are worried that it may turn into a complete collapse — thereby boosting the prices of gold and bitcoin.

“The US now spends $7 trillion a year and earns about $5 trillion, so spending 40% more than it earns,” Ray Dalio, founder of Bridgewater Associates, the world's largest hedge fund, said during an interview with the New York Times “Rejected Times” podcast.

“This deficit has been going on for some time, so its debt is about six times its income. Historically, this situation has caused problems.”

May 11 update: Following reports that US Treasury debt exceeds 100% of gross domestic product (GDP), Mark Godwin, senior vice president of the Responsible Federal Budget Committee, warned that the US is entering a debt spiral.

“When this happens, at some point, you fall into this debt spiral,” Godwin told The New York Times. “The only way to stop it is through some kind of systemic shock.”

Meanwhile, the Congressional Budget Office (CBO) revealed last week that the US Treasury has paid $628 billion in net interest this year to repay debt.

“Net interest expenses on public debt increased by $41 billion (or 7%) because debt is larger than in the first seven months of fiscal year 2025, and long-term interest rates are higher. The decline in short-term interest rates partially mitigated the overall increase in interest payments,” the CBO said.

The price of gold has rebounded in recent weeks after falling to $4,000 per ounce in April, with analysts pointing to inflationary pressure and a debt spiral as the reason for its rise.

“High inflation, growing sovereign debt, and ongoing global uncertainty continue to increase the appeal of gold. The market doesn't need new catalysts — existing ones have always been there,” American Hartford Gold (AHG) President Max Baecker said in an email comment.

In recent years, US debt has soared sharply due to large-scale government spending during the COVID-19 pandemic and during the lockdown, while rapid interest rate hikes to contain inflation have further increased the cost of repayment of the $39 trillion debt pile up.

“So when we look back at history, we see that in all such periods, all fiat currencies depreciated while gold rose,” Dario said, pointing out that gold is currently “the second largest reserve currency for central banks.”

When asked if the economy will move towards “crisis and collapse,” Dario said that the future “financial crisis will mean that the ability to spend is very limited,” adding that he “doesn't think any fiat currency will be an effective means of storing wealth.”

Dario's warning comes at the same time as the opinion of an analyst at Wall Street giant J.P. Morgan Chase, who believes “devaluation transactions are rotating from gold to Bitcoin.”

The price of gold has doubled in the past two years, rising along with silver, as traders bet that continued inflation and the printing of money by the Federal Reserve would depreciate and dilute the dollar.

In a report seen by The Block, J.P. Morgan analysts led by managing director Nikolaos Panigirtzoglou said they saw Bitcoin (known as “digital gold” due to its supply cap and immutability) surpass gold as a depreciation trading tool after the Iran conflict, as Bitcoin ETF inflows surpassed gold ETFs.

In March of this year, Stanley Druckenmiller, another billionaire investor, predicted that in 50 years the dollar would no longer be the world's reserve currency — possibly replaced by Bitcoin or cryptocurrencies.

“We're doing everything we can to destroy it,” Drucken Miller said, possibly referring to the soaring US budget deficit, which he previously described as a “debt bomb.” The dollar “may live longer than me, but I doubt it will still be a reserve currency 50 years from now.”

Drucken Miller called the dollar the “cleanest dirty shirt,” and said he didn't know what might replace the dollar as the world's reserve currency, but he might be “some kind of crypto thing I hate,” which is in line with his first prediction in 2021.

Furthermore, Tesla billionaire Elon Musk also predicted the end of the US dollar (many times), triggering speculation that he is preparing for a big Bitcoin move.

Musk warned that the world is moving towards a post-fiat currency era and claims that “energy is the real currency,” which has sparked speculation among Bitcoin supporters that he is quietly backing cryptocurrencies.

Meanwhile, former Federal Reserve Chairman Janet Yellen warned that US President Donald Trump may be pushing the dollar towards “hyperinflation” — a situation some believe could explode the price of Bitcoin.