U.S. debt nears $40 trillion as focus turns to gold and Bitcoin

Capital flows into gold and Bitcoin have emerged as a key question as total outstanding U.S. federal public debt approaches $40 trillion, cryptocurrency options trading platform BIT said in an analysis. In a post on X, BIT said expanded fiscal spending in the United States is unlikely to face immediate constraints as long as the U.S. economy keeps growing and overseas investors continue to support fiscal deficits and Treasury issuance. BIT added, however, that concerns are growing that major Treasury holders such as Japan could gradually reduce their U.S. Treasury holdings to defend rapidly depreciating domestic currencies. Rising U.S. Treasury yields reflect not only those concerns but also the risk that China could further cut its holdings, BIT said. China has continued to reduce the share of U.S. Treasurys in its foreign exchange reserves and increase its gold holdings as part of reserve diversification, according to BIT.