Bitcoin (CRYPTO: BTC) and gold are rallying even as U.S. debt hit a record $38.5 trillion—fueling bets that Washington will lean on the Fed to keep rates low, a setup that historically lifts hard assets.

Debt Hits $38.5 Trillion

U.S. national debt crossed $38.5 trillion on Monday, pushing the debt-to-GDP ratio above 120%.

Interest payments alone now top $1 trillion annually, exceeding defense spending. The surge stems from pandemic-era stimulus and decades of fiscal expansion on infrastructure, military, and social programs.

Over 70% of the debt is owed to domestic lenders, with the rest held by Japan, China, and the United Kingdom.

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