BlockBeats News, July 27th, as the US government debt continues to rise, investors are refocusing on scarce assets such as Bitcoin and gold, seeing them as a hedge against the declining purchasing power of the US dollar.

US Treasury's "Debt to the Penny" data shows that as of last Friday, the US federal debt has risen to a record $39.7 trillion. Some market participants point out that the US government debt is currently increasing by about $7 billion per day, and in terms of market value, this incremental amount has surpassed most cryptocurrencies.

The founder of LondonCryptoClub stated that the pace of US debt growth is driving the so-called "currency debasement trade," where investors buy into limited-supply assets such as gold and Bitcoin to hedge against the long-term devaluation risk of fiat currencies.

The institution believes that in an environment of "fiscal dominance," Federal Reserve policy may be influenced by government financing needs, with interest rates needing to remain at low levels while continuing to provide liquidity to aid in debt refinancing.

Apollo's Chief Economist Torsten Slok previously warned that the US debt-to-GDP ratio has exceeded 120%, limiting fiscal stimulus space in future economic downturns. Additionally, the Federal Reserve may find it challenging to cut interest rates significantly as in the past, as rate cuts could exacerbate inflation, lower government bond yields, and affect government financing.

Currently, the price of Bitcoin is holding above $65,000, driven by easing US-Iran tensions and falling oil prices, leading to a slight increase in market risk appetite. Meanwhile, Ethereum has shown stronger performance than Bitcoin recently, with the ETH/BTC exchange rate breaking above the 100-day and 200-day moving averages, indicating that the altcoin market may be heating up.

However, analysts point out that since its inception in 2010, the price trend of Bitcoin has been more similar to that of tech stocks rather than traditional safe-haven assets, and its safe-haven characteristics are still a subject of debate.