The U.S. federal debt has reached a record $37 trillion, fueling calls for Bitcoin to rise to $132,000 by the end of the year due to the continuously rising deficit and potential growth in the money supply.
"Thanks to the 'Big Beautiful Bill,' the debt has just officially surpassed the $37 trillion mark," Congressman Thomas Massie stated in a post on X on Wednesday.
The U.S. deficit surged to a new record high a month after President Donald Trump signed the 'Big Beautiful Bill' into law on July 4, which he claimed would cut federal spending by up to $1.6 trillion.
Analysts say that the ballooning deficit could eventually prompt policy easing, including quantitative easing, which involves the central bank purchasing bonds on a large scale to inject liquidity into the financial system.
Bitcoin supporters believe that the growth in the money supply and rising inflation concerns may lead people to re-evaluate Bitcoin's (BTC) monetary scarcity, driving the world's first cryptocurrency to new historical highs.
Data from the U.S. Treasury shows that U.S. debt has skyrocketed from $26.7 trillion in 2020 to over $37 trillion, an increase of 38% in just five years.
Bitcoin has risen over 925% during the same period, and according to Ryan Lee, chief analyst at Bitget exchange, its historical price growth is "directly related" to U.S. debt.
"In the end, this will affect the U.S. monetary system, as a large amount of cash will be used to pay off this debt," he said.
Additionally, Lee noted that the U.S. government may also begin to explore Bitcoin to address its "massive national debt," adding that "the odds are in favor of Bitcoin."
Elon Musk criticized the spending bill in a post on X on June 5, warning that it would "increase the deficit to $2.5 trillion."
Debt repayment could also lead to an increase in the global M2 money supply, which could be the next significant catalyst for Bitcoin's price.
According to estimates by Jamie Coutts, chief crypto analyst at Real Vision, the growing money supply, based on its correlation with BTC, could push Bitcoin to surpass $132,000 by the end of 2025.
Based on its correlation with fiat money supply, the rising inflation and increase in M2 money supply could catalyze Bitcoin to reach a high of $132,000 by the end of 2025.
Nevertheless, this estimate remains conservative compared to the views shared by Arthur Hayes, co-founder of BitMEX and chief investment officer of Maelstrom, who predicts that if the Federal Reserve turns to quantitative easing due to mounting inflation pressures, Bitcoin could climb to $250,000.
Related: Driven by ETF and treasury trends, "altcoin" Google search volume hits a new high since 2021.
Original article: “Record $37 Trillion U.S. Debt and M2 Money Growth Set Foundation for Bitcoin (BTC) $132,000 Target Price”
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