US Debt Soars: Is Bitcoin’s $95K Crash Inevitable? 🤔💰

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Key takeaways:

  • Amid the skyrocketing US debt and a stressed housing market, Bitcoin (BTC) might face a sharp correction to $95,000.

  • Bitcoin’s price is deeply intertwined with macroeconomic trends, including Federal Reserve policies and institutional investments.

The United States, a nation known for its grand ambitions and even grander debts, has once again set a new record. On Monday, the gross national debt swelled by a staggering $367 billion, reaching the dizzying height of $36.6 trillion. This monumental leap followed the signing of the “One Big Beautiful Bill” by the ever-charismatic President Donald Trump, which raised the debt ceiling by a cool $5 trillion on Friday. Could this be the harbinger of a Bitcoin (BTC) crash to $95,000? 🤷‍♂️

Financial analysts, such as Kurt S. Altrichter, CRPS and founder of Ivory Hill Wealth, have sounded the alarm on the US housing market. A critical indicator, which has historically spiked during economic downturns, has now reached alarming levels, according to Altrichter.

The inventory of new single-family homes is now approaching a 10-month supply, a situation that, as Altrichter points out, “has only occurred during or right before recessions.” He attributes this housing market weakness to high interest rates, but more poignantly, to what he calls “demand evaporation.”

If history is any guide, and it often is, this housing oversupply could signal broader economic decline, which would likely weigh on risk-on assets, including Bitcoin. Even if the long-term outlook for crypto is rosy, the immediate reaction from investors tends to be a flight to safety, favoring cash and short-term bonds. 📉

Jack Mallers, co-founder and CEO of Strike, has a different take. On X, he noted that the US Treasury’s only viable option is to expand the monetary base—essentially, to print more money. Mallers argues that the government is unlikely to default on its debt, meaning debasement is the final resort. This, he suggests, could create an ideal environment for a Bitcoin rally. 🚀

Bitcoin’s fate depends on the US Federal Reserve’s actions

However, there is a counter-narrative. Some market participants believe that Bitcoin’s recent breakout above $112,100 is unrelated to fiscal issues or recession fears. Instead, they attribute the broader stock market rally to expectations of policy shifts at the Federal Reserve.

Speculation is also growing around President Trump’s potential push to replace Fed Chair Jerome Powell. If successful, this move could lead to more dovish monetary policy. Trump has repeatedly urged the Fed to lower interest rates. According to Fox Business, he is currently vetting candidates to succeed Powell, whose term ends in May 2026.

Despite strong net inflows into Bitcoin exchange-traded funds (ETFs) and rising institutional demand, BTC remains closely tied to broader equity markets.

The correlation between Bitcoin and the S&P 500 stands at 68%, meaning both asset classes have exhibited similar price trends. The ongoing US import tariffs are another risk factor, potentially hurting corporate earnings, especially in the tech sector, which is heavily reliant on global trade.

Nvidia (NVDA), which recently became the world’s most valuable company with a $4 trillion market cap, could be particularly vulnerable. It’s difficult to predict whether escalating trade tensions will spark a steep decline in tech stocks. While raising the debt ceiling often boosts risk-on sentiment, the threat of a recession may trigger a Bitcoin correction to $95,000. 🤔

Ultimately, a new all-time high for Bitcoin in 2025 remains a possibility, as noted by Strike’s Jack Mallers. But for now, traders are more concerned about whether the AI-driven tech sector can weather the trade conflict. 🌪️

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of CryptoMoon.

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2025-07-10 00:25