The United States is sitting atop a fiscal precipice. With the total U.S. debt surpassing $37.43 trillion as of September 2025, the nation faces a historic reality. Nearly one-quarter of every tax dollar it collects is consumed by servicing the interest payments on its debt burden.

The relentless march of U.S. debt

According to monthly updates from both the U.S. Treasury and Joint Economic Committee, the national debt has soared to $37.43 trillion. This marks an increase of $2.09 trillion in just the past year.

The interest payments alone for FY2025 exceed $478 billion year-to-date, up 17% from last year, according to CNBC.

This expense is projected to account for about 23 cents of every dollar collected by the IRS in revenue. This is a staggering proportion that has risen sharply as global interest rates normalize following years of quantitative easing.

Tariffs: big numbers, small impact

Recent years have seen the U.S. government rack up record-breaking tariff revenues, especially after a suite of new import duties imposed under the Trump administration.

These tariffs are expected to bolster Treasury coffers and could reduce the national deficit by $4 trillion over a decade.

Yet even such windfalls barely dent the mountain of national U.S. debt, with rising interest costs outpacing tariff collection gains. The IMF cautions that “the scale of the increase in tariff revenue is highly uncertain,” while Eliant Capital posted:

“Despite tariff revenues, the deficit for July was $291B with the U.S. spending $630B and collecting $338B meaning 46¢ was borrowed for every $1 spent.”

Nothing stops this train

Macro analyst Lyn Alden has popularized the “nothing stops this train” thesis, a phrase borrowed from pop culture but now synonymous with the U.S. debt dilemma.

Alden’s analysis argues that persistent deficits and relentless spending make for an era of fiscal dominance and that substantive fiscal reform is politically impossible. In her view, the relentless accrual of debt is structurally built into the system, and nothing but a paradigm shift (such as hard money) can break the cycle. Alden told Slate Sundays:

“Just structurally, it’s [U.S. debt] growing above target almost without any way to stop it.”

According to the Peterson Foundation, interest payments are now the third-largest spending category for the federal government. They surpass nearly every other program except Social Security and Medicare.

As a share of revenues, federal interest payments will rise to 18.4 percent by year’s end, a level not seen since the early 1990s.

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As interest payments consume ever-larger shares of federal revenue and traditional remedies like tariffs and spending cuts prove insufficient, the conversation around “hard money” intensifies.

Bitcoin and other cryptos are increasingly viewed as store-of-value alternatives in an era of persistent monetary expansion.

As Alden’s thesis warns, nothing stops this train, and this realization is fueling renewed attention to hard money solutions like Bitcoin and gold.

Investors seek alternatives like Bitcoin and gold

Both gold and Bitcoin have seen strong demand as alternative stores of value amid fiscal concerns and inflationary pressure.

As of mid-September 2025, gold had reached an all-time high, trading at over $3,600 per ounce, up more than 41% year-over-year.

Some analysts expect gold’s rally to continue, projecting prices toward $3,800 by the end of the year as global liquidity concerns drive investors into safe havens.

Bitcoin, dubbed by many as “digital gold,” is trading around $115,000–$118,000 after rebounding from its September lows near $108,000.

While Bitcoin’s price action has been volatile, many analysts, including Lyn Alden, expect to see it to hit at least $150,000 by the end of this cycle.

As fiscal pressures mount, these alternatives are increasingly seen as key safeguards in diversified portfolios, in a time when U.S. debt is spinning out of control.

Russian President Vladimir Putin’s adviser, Dmitry Kobyakov, accused the US of orchestrating a crypto strategy to eliminate its $35 trillion national debt through the manipulation of stablecoins.

During his speech at the Eastern Economic Forum on Sept. 6, Kobyakov claimed that Washington seeks to “rewrite the rules of the gold and crypto markets” as alternatives to traditional currency systems while addressing declining dollar confidence.

The debt problem

The adviser drew parallels to historical US debt strategies from the 1930s and 1970s, arguing America plans to solve financial problems “at the world’s expense.”

He stated:

“The US plans to solve its financial problems at the world’s expense—this time by pushing everyone into the ‘crypto cloud’. Over time, once part of the US national debt is placed into stablecoins, Washington will devalue that debt.”

He described a multi-stage process where the US would transfer its currency debt into crypto instruments before implementing devaluation.

Kobyakov characterized this as a deliberate scheme to eliminate sovereign obligations through digital asset manipulation:

“They have a $35 trillion currency debt, they’ll move it into the crypto cloud, devalue it—and start from scratch.”

The accusations come amid increased global interest in stablecoins, propelled by thriving regulation in the US. In July, President Donald Trump signed the GENIUS Act into law, creating a regulatory framework for these dollar-pegged tokens.

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Strategic tool

However, Kobyakov positioned crypto adoption as a strategic tool rather than a technological innovation, suggesting that the US promotion of digital assets serves debt management objectives.

The adviser warned that global crypto enthusiasm enables Washington’s alleged financial restructuring plans.

The Eastern Economic Forum, held annually in Vladivostok, serves as Russia’s primary platform for discussing Asia-Pacific economic cooperation and alternative financial systems.

Kobyakov’s remarks reflect ongoing Russian criticism of US monetary policy and dollar dominance.

The accusations align with Russian narratives challenging Western financial infrastructure following international sanctions. Moscow has promoted alternative payment systems and criticized dollar-based settlement mechanisms since 2014.

Kobyakov’s claims reflect broader tensions over global financial architecture as countries explore central bank digital currencies and alternative monetary systems.

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State Street launched its first digital debt securities using JPMorgan’s Digital Debt Service, executing a $100 million commercial paper transaction.

According to an Aug. 21 statement, State Street Investment Management purchased the commercial paper for its Short Term Investment Fund. 

The debt securities are issued, settled, and serviced using blockchain technology, delivering streamlined institutional market access.

State Street Investment Management’s global head of cash management, Pia McCusker, described the commercial paper investment as demonstrating tangible technology benefits for institutional clients.

McCusker added:

“Our successful investment in the first commercial paper transaction in blockchain format for our Short Term Investment Fund demonstrates the tangible benefits this technology brings to our clients and positions them at the forefront of the digital transformation in fixed income markets.”

Regarding JPMorgan’s blockchain platform, it allows T+0 settlement as an option, representing a significant advancement over standard settlement cycles for short-term debt instruments.

The digital debt securities utilize smart contracts to automate payments, redemptions, and corporate actions, eliminating manual processing typical in traditional debt markets. 

State Street noted that the $100 million transaction validates blockchain technology’s capacity to handle institutional-scale debt issuances. At the same time, it maintains regulatory compliance and security standards expected from traditional debt markets.

Market modernization impact

Chief product officer Donna Milrod characterized the digital debt launch as advancing State Street’s integrated blockchain-based solution across front-, middle-, and back-office functions. 

Further, the launch reflects State Street’s digital strategy, incorporating on-chain wallet management and blockchain network interoperability groundwork.

JPMorgan Markets Digital Assets Team credit lead Emma Lovett described the digital debt platform as a significant advancement in digital issuance evolution. It provides clients with opportunities to explore blockchain applications in capital markets for efficiency improvements. The technology unlocks ecosystem-wide efficiencies across bond lifecycles.

The digital debt launch follows February reports that State Street was considering crypto custody services for institutional investors. 

A bank executive indicated that State Street planned to roll out crypto custody services next year, with the institution positioning itself alongside other major custody banks entering digital asset services. 

State Street’s blockchain-based debt issuance represents concrete progress toward digital asset integration beyond speculation about future custody offerings.

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Digital Currency Group (DCG) has sued its lending subsidiary Genesis, asking a bankruptcy court to confirm it is owed more than $105 million plus interest on a financial backstop extended during the 2022 crypto downturn.

The case, filed on Aug. 14 in the U.S. Bankruptcy Court for the Southern District of New York, centers on a $1.1 billion promissory note DCG issued to Genesis after the implosion of hedge fund Three Arrows Capital (3AC).

According to the complaint, 3AC, one of Genesis’s largest borrowers, defaulted on a $2.36 billion margin call in mid-2022, creating a significant deficit in Genesis Asia Pacific’s equity, a DCG-owned entity.

DCG said it injected the note “voluntarily” to stabilize the business, but argued that when crypto markets rebounded, Genesis profited from collateral tied to 3AC far beyond the note’s original value. Those gains, it contends, reduced the principal balance and now leave $105 million outstanding.

In a statement, DCG said it “took extraordinary efforts” to keep Genesis afloat in 2022 and simply wants the court to “confirm” repayment status.

The filing adds another dispute to the strained relationship between the two companies. Earlier this year, Genesis’s litigation oversight committee sued DCG, its CEO Barry Silbert, and other executives, alleging that billions of dollars were wrongfully taken from the lender in 2022.

Genesis, one of several high-profile firms to collapse in the wake of the FTX bankruptcy, halted lending in late 2022 and filed for Chapter 11 protection in early 2023.

It emerged from restructuring last year and began distributing roughly $4 billion to creditors, with recovery amounts varying by asset type. As an equity holder, DCG is among the last to be repaid and has challenged parts of the bankruptcy plan.

Mentioned in this article

The leading US-based crypto exchange by trading volume is experiencing a drop in stock value while it announces a $2 billion debt offering.

Today, Coinbase Global (COIN) announced plans to offer $2 billion in convertible senior notes through a private placement to qualified institutional buyers.

The offering, which is subject to market conditions, includes $1 billion in notes due by 2029 and another $1 billion due by 2032. Coinbase says it may also grant initial purchasers options to buy up to an additional $150 million of each series within 13 days of issuance.

Coinbase says the notes will be senior, unsecured obligations and will accrue interest that can be paid out semiannually.

The notes will be convertible into cash, shares of Coinbase’s Class A common stock, or a combination of the two funding options, at the company’s discretion. Terms such as interest rate and conversion rate are to be determined at pricing.

Coinbase also plans to enter into capped call transactions to mitigate potential dilution and offset excess cash payments upon conversion.

Proceeds from the offering are expected to support general corporate purposes, including capital expenditures and potential acquisitions.

Following the announcement, COIN has tumbled 4.9%, currently trading for $302.56, about 30% down from its all-time high.

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Macro guru Luke Gromen says the rise of Bitcoin (BTC) treasury companies is a logical response to the US government’s continued debasement of the dollar.

In a new video update on YouTube, Gromen says investors are currently reacting to a large-scale financial bubble that has been “kicked upstairs” through the stock, banking, and housing markets before finally being pushed into the Treasury market.

Gromen notes that the only way for the US government to maintain the bubble – rather than face a default or a severe depression to get its fiscal situation back in order – is to devalue its debt via inflation.

Now that such a reality is becoming clear to market participants, Gromen says it makes perfect sense that many corporate entities are creating shareholder value by taking advantage of BTC’s strict supply cap.

“In my opinion, it’s critical to remember how we got here. We had an equity bubble, it popped, we kicked the problem upstairs to the banking sector and the housing sector, it created a housing bubble, it popped, we kicked the problem upstairs to the Treasury market by backstopping virtually everything… 

Now the credit risk is at the Treasury market level, except, Treasuries have no credit risk. The government can always just print the money to make interest payments and avoid default. So there’s no credit risk in Treasuries, only inflation risk. 

So in my opinion, what we’re seeing in Bitcoin treasury companies in particular is logical, in light of this primrose path we’ve followed over the past 25 years. As more and more people begin to realize the only way out of this is severe devaluation of US debt, of US sovereign debt, of Western sovereign debt.

In that case, I would expect credit spreads to remain relatively low, because all else equal, I’d rather own an Apple bond or a Microsoft bond than a US Treasury bond.”

At time of writing, the US government’s national debt is about $37 trillion.

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The former US House of Representatives Speaker, Kevin McCarthy, is warning that the national debt is nearing a crisis situation.

In a new interview on CNBC’s Squawk Box, the Republican politician says that the next US president will have to start reducing government spending as borrowing continues to soar, threatening the dollar’s global dominance.

The US debt just ballooned by more than $519 billion between July 3rd and July 28th, reaching a total of more than $36.8 trillion.

“Your real question is, how do you keep the dollar the world currency? I think the more that we go in and sanction we’re pushing countries to learn to go around the dollar. I think President Trump has done a very smart move against the BRICS, what they were trying to do. But it all comes down to debt. That’s why debt is our greatest threat to America, and you cannot avoid it any longer.”

McCarthy says that if the next president doesn’t materially address the debt, then significant safety net programs like Social Security may face deep cuts.

“The next President is going to have the debt crisis… and the challenge is, if you look in the past, the Democrats had the ‘Blue Dog.’ Those were Democrats who cared about debt. They’re no longer there. No one in Congress has been elected saying they’re going to balance the budget. The country has to be educated on this, and Congress is going to have to act, because Social Security in the next administration is either going to take a 24% cut or [it will] do something about it.”

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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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JPMorgan Chase, Citi and Wells Fargo say they’ve lost $5.361 billion from customers who can no longer pay their debt.

In their Q2 2025 earnings reports, the three major banks disclosed billions of dollars in losses from “net charge-offs” — loans written off as uncollectible after all efforts to recover payments proved unsuccessful.

Among the trio, JPMorgan Chase reported the highest level of charge-offs at $2.4 billion, predominantly driven by bad credit card debt.

Meanwhile, Citi wiped $2.234 billion in bad loans off its books, including $1.889 billion tied to its retail credit card portfolio.

And Wells Fargo recorded $977 million in net charge-offs, fueled by $818 million in sour loans from its consumer banking and lending segment.

The figures come as fresh data from the Federal Reserve Bank of New York shows that US credit card balances reached $1.18 trillion by the end of March 2025.

Despite the losses, Citi reported a $225 million decline in net credit losses quarter-over-quarter, and Wells Fargo saw a $12 million decrease in net charge-offs over the same period. However, JPMorgan witnessed an increase of at $179 million in net charge-offs over the three-month period.

Additionally, the three banks reported strong earnings in Q2, with JPMorgan, Citi and Wells Fargo generating $15 billion, $4 billion and $5.5 billion in net income, respectively.

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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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Macro strategist Luke Gromen warns that the US dollar will keep losing value amid a ballooning $36.60 trillion national debt.

In a new YouTube update, Gromen says the US, with its record-level national debt, is now forced to choose between sacrificing the bond market or letting the dollar fall to maintain financial and economic stability.

According to the macro expert, the US government will ultimately resort to debasing the dollar by printing more money to manage its debt, rather than allowing Treasury yields to soar in an effort to attract investors.

“What we’re seeing in these bond markets, US and more importantly for the moment Japan and the UK, is a choice. You got to sacrifice your currency or you to sacrifice your bond market. And our view, really the base underpinning of our view why gold and Bitcoin are trading where they are trading, is they always choose to sacrifice the currency…

Because if they sacrifice the bond market and let rates just go up and up and up, given their debt levels, they ultimately end up sacrificing both: the currency and the bond market because higher rates drive receipts down and interest up and that means interest quickly goes above your receipts.

And when that happens, that drives essentially hyperinflation of the currency. Either they can’t pay the bonds and the bonds back the currency or more likely, they print the money just to pay the interest and drive a version of hyperinflation.

So they always choose to sacrifice the currency over sacrificing the bond market when debt levels are high as they are and that’s why, because sacrificing the bond market only buys them a little bit of time, and they ultimately end up sacrificing both.”
 

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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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