US Debt Hits Record $37 Trillion as Analysts Predict Bitcoin Will Reach $132K by Year End

The federal debt of the United States has surged to $37 trillion! This unprecedented event has ignited a new debate over the current fiscal policy and the potential impact of this on Bitcoin’s (BTC) price. Some market analysts believe that the price of the premier cryptocurrency can reach as high as $132K before 2025 ends, driven by expanding money supply, possible regulatory ease, and increasing deficit.

In an X.com post on Wednesday, Rep. Thomas Massie said that the rise was due to the recently passed One Big Beautiful Bill Act. The plan was signed into law by President Donald Trump on July 4. It was supposed to decrease federal spending by $1.6 trillion, but the deficit has already reached record highs just a month later.

The U.S. Treasury's data shows how big the surge is as the national debt went from $26.7 trillion in 2020 to more than $37 trillion in just five years, a 38% increase. Over the same period, Bitcoin has gained more than 925%, with analysts pointing to a “direct correlation” between debt growth and BTC prices.

Ryan Lee, chief analyst at Bitget, warned that servicing such massive debt would absorb vast amounts of cash from the economy. “The more the debt grows, the higher the likelihood of BTC price soaring to new highs,” he said, adding that Washington could even explore Bitcoin as part of a strategy to manage its debt burden.

Analysts say that the M2 money supply, which is a broad measure of circulating currency and bank deposits, is also very important, in addition to debt levels. When M2 grows, Bitcoin generally goes up because investors want assets with a fixed supply to protect themselves against inflation.

Jamie Coutts, chief crypto analyst at Real Vision, estimates that rising M2 could propel Bitcoin above $132,000 by the close of 2025. “The correlation between fiat supply growth and Bitcoin is too strong to ignore,” he noted.

Not all projections are capped at $132,000. Arthur Hayes, co-founder of BitMEX, believes that if the U.S. Federal Reserve goes back to large-scale quantitative easing (QE) in response to economic strain, Bitcoin could climb as high as $250,000.

Meanwhile, critics like Elon Musk have slammed the spending bill, warning it could push the deficit to $2.5 trillion, further pressuring monetary policy.

With debt, deficits, and liquidity dynamics aligning, Bitcoin’s advocates see the coming months as a potentially historic chapter for the cryptocurrency, one that could test, and perhaps redefine, its role in the global financial system.