The crypto market faces instability amid rising US government debt, which causes concern among investors.
State of US Debt
In July 2025, the US budget deficit amounted to $291 billion, marking the second-highest deficit for this month in history. This raises concerns about the ability to meet future debt repayments. Key industry figures, such as Ray Dalio, warn of a potential debt-induced crash.
Signals of Danger in the Bond Market
Recent data indicates that yields on US corporate bonds have reached historical lows not seen since 1998. The decline in yields also reflects the state of government bonds, which have significantly lost value. This may indicate deteriorating demand for bonds, which in turn could shift investment preferences toward cryptocurrencies.
Impact of Political Factors on Crypto Market
Donald Trump has been actively advocating for lower interest rates, which could stimulate demand for riskier assets, including cryptocurrencies. Lower rates could lead to increased market liquidity; however, this is happening amidst concerns regarding rising debt burdens. The integration of traditional financial institutions with cryptocurrencies is becoming a key aspect of this dynamic.
The complex situation regarding US debts and changes in the bond market may significantly impact the cryptocurrency market in the coming months. Investors will continue to monitor developments in the macroeconomic landscape.
