According to the latest official release from the US Department of the Treasury, the total US public debt stands at $40,117,045,127,072, or approximately $40.12 trillion. That figure is up by $2.687 billion compared to a year ago, equivalent to an average increase of $7.4 billion every day, or about $308 million per hour.
On the same day, the price of Bitcoin was $80,695, up 3.74% in 24 hours. Its market capitalization is $1.62 trillion, meaning the total value of all Bitcoin in the world is equivalent to about 4% of the country's debt.
These two figures are often simply placed side-by-side with the conclusion that "debt is rising, so buy Bitcoin." This article will not do that, as the data itself does not support such a simplistic narrative. What is actually interesting is how the relationship works, why the trends can move in opposite directions in the short term, and the one figure that is most often overlooked.
Key Takeaways
- US debt of $40.12 trillion as of the September 2, 2026 release. Up 7.18% in one year, an average of $7.4 billion per day.
- The journey from $39 trillion to $40 trillion took only 153 days, from March 18 to August 18, 2026.
- The interest payments are the real problem, not the principal. The first ten months of the 2026 fiscal year have already consumed $1.17 trillion in interest, up 15% compared to the same period last year. Interest is now the second-largest federal expenditure after Social Security.
- There is a 1.80 percentage point gap between today's market interest rate (5.25% for 30 years) and the average rate on existing debt (3.447%). Every $1 trillion of maturing debt that is refinanced adds approximately $18 billion in annual interest costs.
- The market has already reacted. Bitcoin's 90-day correlation with gold has broken through 50% to hit a record high, while its correlation with the Nasdaq 100 has dropped from over 60% to around 33%.
- But the thesis hasn't been proven this year. Throughout the period as debt climbed toward $40 trillion, Bitcoin actually fell 37.9% from its October 2025 peak of around $130,000.
- The immediate test is tonight: Nonfarm Payrolls data will be released at 7:30 PM WIB, with economists' estimates ranging from a loss of 25,000 jobs to an addition of 125,000. Following that are the September 11 inflation report and the Fed's interest rate decision on September 15–16.
How Fast the Numbers Are Moving
The word "surge" in headlines is no hyperbole. Here is the speed, based on official Treasury data:
- Debt surpassed US$39 trillion on March 18, 2026.
- Debt surpassed US$40 trillion on August 18, 2026, reported the following day.
- The interval between the two: 153 days to add US$1 trillion.
For comparison, the addition of US$2.687 trillion over the last 12 months is equivalent to about 1.7 times the entire market capitalization of Bitcoin, in just one year.
Of that US$40.12 trillion total, US$32.42 trillion is held by the public, meaning investors, pension funds, banks, and foreign governments. The remaining US$7.70 trillion is debt held between US government agencies themselves. The relevant figure for the bond market is the former, as that is what must be bought and sold.
The debt-to-GDP ratio reached approximately 100% in 2025 and is projected by the Congressional Budget Office to exceed 118% by 2035. The previous record of 106% was set in 1946, following World War II. This year's projected deficit is approximately US$1.9 trillion.
The Most Overlooked Figure: The Refinancing Gap
This is the part that I find most important and least discussed, even though it can be calculated independently using Treasury data.
The US government does not pay today's market interest rates on its entire debt. It pays the rates locked in when the debt securities were issued, many of which were issued years ago when interest rates were much lower.
As of July 31, 2026, the average interest rate on all interest-bearing US debt was only 3.447%. Meanwhile, the Treasury curve on September 3, 2026, shows:
The spread between the 30-year market rate and the average coupon rate is 1.80 percentage points. This means that every maturing low-interest legacy bond that must be replaced with a new one immediately increases the interest burden.
The rough calculation is simple: every US$1 trillion refinanced at a 1.80 percentage point gap adds approximately US$18 billion in annual interest expense, and that increase is permanent for the duration of the new bond's term.
There is one detail that confirms this trend. The average interest rate on Treasury Notes is only 3.309%, lower than Treasury Bills at 3.758%. Notes are medium-term, so that low figure reflects issuances from the low-interest-rate era that have not yet matured. As long as those low-interest notes continue to mature and are replaced at levels of 4.5% to 4.8%, the average interest rate will continue to rise without the need for any new rate hikes from The Fed.
And that is exactly what is happening. The average interest rate on interest-bearing debt rose from 3.294% in May 2025 to 3.447% in July 2026. The rise is slow, but the direction is clear.
How Large Is the Interest Bill Now
The absolute figures are becoming hard to ignore.
In the first ten months of fiscal year 2026, through July 31, 2026, total interest expense was recorded at US$1,170 billion, or approximately US$1.17 trillion. The same period in the previous fiscal year recorded US$1,017 billion. This represents an increase of 15.02% in one year.
If that rate holds until the end of the fiscal year, total interest for fiscal year 2026 will land at around US$1.40 trillion, up from US$1.22 trillion in fiscal year 2025.
To put that into perspective:
- About US$117 billion per month, or US$3.85 billion per day.
- Interest is now the second-largest federal spending category, trailing only Social Security.
- That projected annual interest bill is equivalent to 87% of the entire market capitalization of Bitcoin today.
That last figure isn't just a gimmick for comparison. The point is this: Bitcoin is often discussed as a massive asset, and it is indeed large. But one country's annual interest bill nearly equals the entire value of all Bitcoin ever mined. That illustrates just how lopsided the scale is between the fiscal problem and the size of the instrument often touted as the solution.
The Bond Market Is Already Signaling
Ballooning debt has to be sold to someone, and the price to entice buyers is rising.
On August 18, 2026, the 30-year Treasury yield broke through 5.33%, the highest in 19 years. A US$25 billion 30-year bond auction last month resulted in a yield of 5.216%, the highest since 2001. Two demand indicators are also weakening: the bid-to-cover ratio is only 2.39, below the 12-month average, while the portion that must be absorbed by primary dealers has reached 11.5%, higher than usual. When dealers have to absorb more, it is a sign that end investors are less interested.
The 10-year yield has also remained above 4.6% for about a month, more than 40 basis points above the CBO projection. This means the real cost of debt is already more expensive than assumed in budget planning.
Future issuance needs remain large: the Treasury estimates net marketable borrowing of US$739 billion for July through September and US$628 billion for October through December. The bond buyback program is also scheduled to be increased to US$4 billion per operation starting September 9.
Why This Connects to Bitcoin
The argument has a name: debasement trade. The core idea is to reduce exposure to government currencies and debt securities, then move it into assets with limited supply. Traditionally, that meant gold. What is new is that Bitcoin is now included in that category, as its supply is permanently capped at 21 million units.
The logic rests on one premise: if debt grows faster than the ability to pay it back, there are ultimately only two ways out, namely permanently high interest rates or currency devaluation. Both hurt bondholders and cash holders, and both relatively benefit assets that cannot be printed.
What makes this more than just an argument is that the market is starting to treat Bitcoin in accordance with that argument:
- Bitcoin's 90-day correlation with gold has broken through 50% and hit a record high. The 30-day metric has even reached 0.8. In early 2026, this figure was around negative 0.9.
- Bitcoin's correlation with the Nasdaq 100 has dropped from over 60% to around 33%.
These two movements occurred simultaneously, and the pattern is significant. Bitcoin isn't just rising; it is decoupling from the tech asset class and moving closer to gold. If this continues, it suggests that some institutional capital is reclassifying Bitcoin from a risk asset to a macro hedge.
Grayscale Research has also explicitly linked the US$40 trillion-plus debt and ongoing deficits to a potential rise in interest in the debasement trade, citing Bitcoin, Ether, and Zcash as candidates. Ray Dalio, founder of Bridgewater Associates, estimates that US debt could reach US$55 trillion to US$60 trillion within a decade, and suggests being underweight on bonds while overweight on gold and a small amount of Bitcoin.
What You Shouldn't Miss: The Thesis Hasn't Been Proven This Year
This is the part usually missing from articles about debt and Bitcoin, even though it is the most useful for decision-making.
If the relationship between debt and Bitcoin were direct and mechanical, Bitcoin should have risen steadily throughout 2026 as debt headed toward US$40 trillion. The opposite happened:
- Bitcoin's peak of around US$130,000 in October 2025.
- The low point of US$59,800 in early February 2026.
- Today US$80,695.
This means that from its peak, Bitcoin is still down 37.9%, precisely during the period when debt figures moved most dramatically. From its February low, Bitcoin has indeed risen 34.9%, but that is a different story.
Why the contradiction? Because massive debt creates two conflicting effects, and both operate on different time horizons.
The first path is interest rates. This is short-term, and currently, its effect on Bitcoin is negative. Ballooning debt requires high yields to attract buyers. High yields, especially real yields, make holding non-yielding assets expensive in terms of opportunity cost. A 30-year bond paying 5.25% is a direct competitor to assets that pay nothing. This explains why debt rose throughout 2026 while Bitcoin fell.
The second path is devaluation. This is medium to long-term, and its effect is positive. Ultimately, the ever-increasing interest burden narrows the options. If the way out is currency debasement, assets with a fixed supply are relatively advantaged. We discuss the link between monetary policy direction and asset values in more depth in what is devaluation and fiat money.
The third path is liquidity. This is the immediate catalyst. What usually moves prices is not the debt figure itself, but the policy response to it: bond buyback programs, the end of quantitative tightening, or interest rate cuts. All of these add liquidity, and risk assets usually react to that much faster than to debt-to-GDP ratios.
So, in summary: the first path is currently winning, the second is building pressure, and the third will determine when the trend shifts. That is why rising debt and falling Bitcoin can occur simultaneously without invalidating the thesis, but it is also why that thesis cannot be used as a reason to buy at just any point in time.
For context, following similar Bitcoin and gold correlation episodes in 2020 and the fourth quarter of 2022, Bitcoin recorded gains of approximately 172% and 350% in the subsequent periods. Two occurrences do not make a statistical pattern, and the macro conditions are different, so this is historical context only, not a projection.
Tonight: US Labor Data Faces Immediate Test
Before all of this becomes a long-term story, there is one event that will test the direction within hours. August Nonfarm Payrolls data will be released tonight at 7:30 PM WIB.
The consensus estimates an addition of around 53,000 to 58,000 jobs, depending on the consensus compiler, with the unemployment rate expected to remain at 4.1% and hourly wage growth 0.3% monthly or 3.0% annually.
But that consensus figure hides the most important thing: economists themselves are in disagreement, and the gap is very wide.
The range spans from a loss of 25,000 jobs to an addition of 125,000. That 150,000 difference between the lowest and highest estimates means one thing in practical terms: the chance of a major surprise is high, and price reactions could be sharp in either direction.
Three contextual figures that make this release more sensitive than usual:
- Last July, the US actually lost 23,000 jobs. If August is also negative, that would be two consecutive months, which is a strong argument for holding interest rates steady.
- May and June data have already been revised downward by a combined 103,000. This means that revisions to previous months' figures sometimes have as much impact as the headline number itself.
- The ADP report for August recorded only 38,000, below the expectation of 47,000. This is an early indicator pointing toward the weaker side.
What Makes This Release Different: The Logic Is Inverted
Under normal conditions, strong labor data is good news for risk assets because it means the economy is healthy. Not anymore.
Because the Fed is considering hikes in interest rates, rather than cuts, strong data actually provides room to continue tightening. So today, the market reads strong employment as risk-off, and weak employment as risk-on. This is the opposite of the reflex people are used to.
Here is an overview of the three scenarios:
There is one balancing note worth keeping in mind. BofA Securities suggests that this round of employment data may not be the primary driver for the September decision, arguing that the inflation data released on September 11 carries more weight. So, even if there is a sharp move tonight, it may not necessarily be the final direction.
One technical factor should also be noted: the cancellation of temporary protected status affecting more than 300,000 workers could potentially weigh on the August figures for administrative reasons, rather than a weakening in labor demand. Weak numbers tonight do not necessarily mean the economy is weakening.
Its Connection to the Debt Story Above
This is what ties the two together. Regardless of tonight's outcome, the 1.80 percentage point gap between market interest rates and the average interest rate on existing debt will not narrow. Low-interest legacy debt continues to mature and must be replaced with higher-interest debt.
What tonight's data determines is simply the speed. Strong numbers mean yields will remain high or rise, the gap will widen, interest bills will grow faster, and in the short term, Bitcoin will be pressured as the interest rate path strengthens. Weak numbers mean the opposite: yields soften, pressure on non-yielding assets decreases, and the liquidity path begins to work.
So, if there is one way to interpret tonight, it is this: Nonfarm Payrolls determine the timing, not the direction. The direction has already been set by the arithmetic of debt, which runs on its own without needing anyone's approval.
What to Watch
If you want to monitor whether the third path is starting to turn, these are the relevant indicators, starting with the most immediate:
- US labor data tonight at 7:30 PM WIB, with a very wide range of estimates as discussed in the previous section.
- August inflation data on September 11. This is the most decisive factor for policy direction.
- The Fed's interest rate decision on September 15 to 16. The probability of a rate hike is now at 50.2%, down from 63.2% the previous day after Fed Governor Christopher Waller opened the possibility of holding rates steady.
- The bond buyback program will be increased to US$4 billion per operation starting September 9. This is a concrete liquidity signal.
- The next 30-year bond auction, specifically the bid-to-cover ratio. If demand continues to weaken, yield pressure will persist.
- The spread between the 30-year yield and the average interest rate applied. As long as that 1.80 percentage point gap does not narrow, interest expenses will continue to rise automatically.
To learn how to read these kinds of market signals yourself, we have structured the framework in how to analyze crypto, while we discuss the stages of the crypto market cycle in crypto bull market cycles.
Conclusion
The US debt of US$40.12 trillion is a real number, and the pace of US$7.4 billion per day is also real. But what is most worth noting is not the principal amount, but the interest bill, which rose 15% in a year to US$1.17 trillion in just ten months, and the 1.80 percentage point gap that causes that burden to keep rising every time old debt matures, without the need for any new decisions from anyone.
For Bitcoin, this means two things at once. In the short term, the high yields required to sell that much debt actually pressure non-yielding assets, and that was proven throughout 2026 when Bitcoin fell 37.9% from its peak amid the surge in debt. In the medium term, its correlation with gold, which is hitting records, while its correlation with tech stocks shrinks, suggests that part of the market has begun to treat Bitcoin as a macro hedge rather than a tech asset.
What remains unclear is when the second path will outweigh the first. That is a decision that lies in the hands of the Fed, not in the debt numbers.
Monitor and Buy Bitcoin on Mobee
You can monitor today's Bitcoin price in real-time, and buy Bitcoin directly with Rupiah on Mobee, a Digital Financial Asset Trader registered and supervised by the OJK.
For a volatile market like today's, the Spot Grid feature allows for automated buy and sell orders within a price range you set yourself, so the results don't rely entirely on perfect timing. Before you start, it's a good idea to understand the different asset categories in types of crypto, how to store assets securely, and some basic crypto trading tips .
Disclaimer. All information in this article is for educational purposes only and is not a recommendation to buy or sell. Asset prices can change rapidly, even within minutes, and all price data is point-in-time as of the article's drafting. Derived figures such as gap refinancing and fiscal year interest projections are editorial calculations based on official data, not official US government projections. Always conduct your own research and align your decisions with your individual risk profile.
