Bitcoin's long-term investment case is gaining support from rising U.S. debt and persistent fiscal deficits, according to BlackRock global head of digital assets Robbie Mitchnick, who said renewed concern about government borrowing was leading some investors to consider assets outside the sovereign monetary system.
U.S. Gross Federal Debt Reaches $40.05 Trillion
Treasury data showed gross federal debt crossing $40 trillion less than five months after reaching $39 trillion. The total includes approximately $32.3 trillion held by the public and around $7.8 trillion in intragovernmental holdings. The debt has more than doubled since 2017, when it stood near $19.95 trillion. The increase spans both Republican and Democratic administrations and includes pandemic spending, tax policies, mandatory programs and continuing budget shortfalls.
The Congressional Budget Office projects a $1.9 trillion federal deficit for fiscal 2026. Under current law, the annual deficit could expand to $3.1 trillion by 2036, reaching 6.7% of gross domestic product. Net interest spending reached approximately $970 billion during fiscal 2025. Higher interest rates make refinancing the existing debt more expensive, potentially adding to future borrowing requirements. This macro backdrop has supported Bitcoin's recent rally, with the Bernstein $150K Bitcoin forecast also citing debt dynamics.
BlackRock Positions Bitcoin as a Fiscal Hedge
BlackRock has previously described Bitcoin as a scarce, decentralized monetary alternative with return drivers that can differ from those of stocks and bonds. Mitchnick characterized Bitcoin as digital gold while describing Ethereum as a technology-focused investment. Bitcoin posted its strongest three-day advance since 2023 during the previous week, rising from the low-$60,000 range to nearly $80,000. Stocks struggled and bond trading became volatile during part of the same period.
Mitchnick said Bitcoin's ability to rise under those conditions reflected its distinct nature as an emerging store of value. Bitcoin's relationship with traditional markets remains inconsistent. It has sometimes moved alongside technology stocks during periods of abundant liquidity and fallen sharply when investors reduce risk. The asset also remains far more volatile than gold. A fiscal hedge can lose value over short periods even when government debt continues rising, making the thesis more relevant to long-term allocation than immediate price forecasting. This positioning is reinforced by the Bitcoin bull score reaching 80, which tracks technical and on-chain indicators.
CLARITY Act Matters More Beyond Bitcoin
Mitchnick said the pending CLARITY Act could provide additional upside across cryptocurrency markets, but investors were not necessarily including passage in their base expectations. Markets in general and a lot of the participants around the ecosystem are seeing the regulatory clarity as further potential upside, but not necessarily banking on it, he said. Bitcoin already has a comparatively established U.S. regulatory position with spot ETFs approved in January 2024 and CFTC commodity classification.
Market structure legislation could have a larger effect on decentralized finance, trading platforms and tokens whose regulatory classifications remain disputed. Those areas need clearer rules governing registration, custody and agency oversight. For Bitcoin, Mitchnick's argument places fiscal policy ahead of cryptocurrency legislation. The next tests will come from federal deficit data, Treasury borrowing plans, long-term bond yields, ETF flows and Bitcoin's behavior during renewed market stress. Bernstein recently presented a related argument, saying debt concerns could accelerate Bitcoin's recovery.
