The U.S. national debt is climbing at a pace that's hard to ignore.
The total debt has surged to nearly $38.88 trillion , as of March 13. It's not just the scale, but the speed is what everyone is spooked about.
And with the Federal Reserve set to announce its latest policy decision, the intersection of debt, rates and crypto is back in focus.
Related: U.S. debt worries sends crypto stocks crashing
Debt surge raises pressure on Fed policy
Former U.S. Representative Ron Paul has warned that the situation could worsen, particularly as geopolitical tensions escalate in the Middle East.
In a blog post called "Will the Dollar be a Casualty of the Iran War?" Paul noted that continued spending, including war-related costs, could push debt growth even higher, placing added pressure on the Federal Reserve.
At the same time, global confidence in U.S. debt could begin to shift. Paul argues that foreign buyers may scale back purchases due to both fiscal concerns and geopolitical friction.
"The costs of this war will put added pressure on the Federal Reserve to keep interest rates low and increase its purchase of Treasury bonds in order to monetize the federal debt."
In the end, he also warned about the collapse of the "welfare-warfare-fiat money system."
"Whether this system is replaced by an even more authoritarian one or by a system of limited government and much more freedom depends on whether those of us who know the truth do our best to spread the message that the key to peace and prosperity is a system of free markets, limited government, individual liberty, and peaceful relations and free trade with all nations.
If that happens, it could accelerate broader de-dollarization trends, a long-term theme that crypto markets have increasingly priced in.
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Why this matters for Bitcoin and crypto
Historically, rapid debt expansion has raised concerns about fiat currency stability, particularly the U.S. dollar.
Bitcoin (BTC), with its fixed supply, is often compared to gold as a hedge against currency debasement. When confidence in traditional systems weakens, capital tends to explore alternative stores of value.
A clear example came during the pandemic.
In 2020-2021, massive stimulus, almost zero interest rates, and an expanding money supply triggered inflation concerns and negative real yields. Bitcoin rallied from around $5,000 to nearly $69,000, as both retail and institutional investors sought protection against dollar dilution.
Even now, as the war in the Middle East rages on, Bitcoin has shown more resilience than traditional safe-haven assets like gold and silver.
Related: 'Rich Dad Poor Dad' author has blunt take on gold rally amid Iran war
Short-term risks vs long-term crypto narrative
Still, the near-term outlook is a little uncertain.
Markets currently expect the Federal Reserve and Jerome Powell to hold rates steady between 3.5% and 3.75%, with potential cuts pushed to later in the year. Inflation remains a concern, especially as energy prices rise due to the ongoing conflict.
If rates stay higher for longer, liquidity conditions remain tight, a headwind for crypto in the short term.
We can see how the FOMC decision is muting investor sentiments. At press time, Bitcoin was trading near $72,059.95, having dropped 2.2% after a rally to almost $76,000 just a day earlier.
But zooming out, one cannot ignore the bigger picture.
Rising debt, potential monetary easing and shifting global demand for U.S. assets all point toward a system under strain. In that environment, decentralized assets like Bitcoin continue to gain relevance.
Related: Bitcoin, XRP slide as March 18 Fed decision looms large
This story was originally published by TheStreet on Mar 18, 2026, where it first appeared in the Federal Reserve & FOMC News section. Add TheStreet as a Preferred Source by clicking here.
