The United States federal debt has reached a record $37 trillion, prompting renewed speculation that mounting deficits and expanding money supply could propel Bitcoin to fresh all-time highs in 2025. Analysts suggest the flagship cryptocurrency could reach $132,000 — and potentially even higher — if inflationary pressures drive looser monetary policy.
Debt Surge Linked to Potential Quantitative Easing
According to US Treasury data, the national debt has grown from $26.7 trillion in 2020 to more than $37 trillion today — a 38% increase in just five years. The spike follows the signing of the “One Big Beautiful Bill Act” by President Donald Trump on 4 July, legislation he claimed would cut up to $1.6 trillion in federal spending.
Source: Thomas Massie
However, critics, including Representative Thomas Massie, argue the measure is adding to the debt burden. “Thanks to the One Big Beautiful Bill Act, the debt just officially passed the $37 trillion mark,” Massie said in a recent social media post.
Analysts warn that such fiscal expansion could push the government towards quantitative easing (QE) — large-scale bond purchases by the Federal Reserve that inject liquidity into the economy.
Correlation Between Debt and Bitcoin Growth
Bitcoin advocates point to a strong historical link between rising US debt and Bitcoin price gains. Since 2020, Bitcoin has surged over 925%, a trend Ryan Lee, chief analyst at Bitget exchange, says is “directly correlated” with America’s debt trajectory.
“Ultimately, this will impact the American monetary system as a considerable amount of cash will be deployed into servicing this debt,” Lee explained. “The more the debt grows, the higher the likelihood of BTC price soaring to new highs.”
Lee also suggested that the US government may eventually explore Bitcoin as a potential tool to address its “massive national debt.”
Inflation and Money Supply as Catalysts
Elon Musk has voiced concerns over the fiscal outlook, warning in June that the bill could lift the annual deficit to $2.5 trillion. Servicing such debt, analysts say, may also expand the global M2 money supply — a broad measure of cash and deposits in circulation.
Source: Thomas Massie
Jamie Coutts, chief crypto analyst at Real Vision, believes this could be the next major driver for Bitcoin. “Based on its correlation with BTC, the growing money supply could push Bitcoin above $132,000 before the end of 2025,” he noted. Rising inflation and monetary expansion, he added, could accelerate this move.
Predictions Vary, Some Far More Bullish
While the $132,000 target is already ambitious, some forecasts are even more aggressive. Arthur Hayes, co-founder of BitMEX and chief investment officer at Maelstrom, predicts Bitcoin could climb to $250,000 if the Federal Reserve shifts towards QE in response to inflationary pressures.
This would mark an unprecedented valuation for Bitcoin, solidifying its role as a perceived hedge against fiat currency debasement. However, such projections remain speculative, with market conditions and policy decisions likely to determine the final trajectory.
