As US debt doubles China, Bitcoin could become US global dominance

The US federal deficit is projected to reach $1.9 trillion in fiscal year 2025, roughly 2.4 times China's estimated shortfall of 5.66 trillion yuan ($780 billion);

According to Reuters, the US Treasury recorded a deficit of $1.15 trillion in the first five months of the fiscal year (October to February), a 38% increase from the previous year..

The Parliamentary Budget Office estimates a full-year shortfall of 6.5% of GDP, well above the 50-year average of 3.8% due to a surge in eligibility costs and interest payments.

Debt services alone reached $396 billion over the same five months, but federal revenue growth was stagnant at around 1% year-on-year.

In contrast, China's Treasury has set its 2025 deficit target at 4% of its highest GDP in over 30 years.

Although the nominal figures are smaller, estimates adjusted from Fitch's valuation suggest that China's actual budget deficit is close to 8.8% of GDP if it includes non-budget borrowing.

The increase reflects a deliberate shift towards infrastructure investments, expanding subsidies and efforts to offset the long-term slowdown in the real estate market, as outlined in the Beijing government work report.

The scale and trajectory of US debt growth has rekindled debates over the long-term viability of the dollar as a major reserve currency in the world.

Bitcoin's global role amid rising sovereign debt

BlackRock CEO Larry Fink recently warned that escalating the US deficit could erode global trust in the dollar and open the door for alternative financial products such as Bitcoin. The decentralized structure and fixed supply of Bitcoin has led some analysts to view it as a hedge against the devaluation of Fiat currency.

Among these concerns, the concept of Bitcoin as a strategic reserve asset is gaining momentum in the policy world. Former President Donald Trump has signed an executive order to use assets seized from criminal cases to establish a national Bitcoin Reserve and place digital assets as a tool to strengthen financial resilience.

However, adoption faces challenges. Bitcoin's perceived price volatility and regulatory direction continue to raise concerns. For example, the European Central Bank has rejected the idea of ​​including Bitcoin in its reserves. President Christine Lagarde said it will not happen while in office.

As US debt exceeds even the rise in China's financial imbalance, debate about reserve diversification, particularly involving Bitcoin, could intensify.

Supporters cite Bitcoin's deflationary wealth and independence from central banks, but the strength of critics' debate over instability and unclear regulatory frameworks has diminished.

With increasing uncertainty in the future of global monetary policy, searching for alternative protections against systematic fiscal risk could lead to Bitcoin.