Bitcoin (CRYPTO: BTC) is increasingly seen as a national security tool, sparking a debate about how Bitcoin will integrate in times of rising sovereign debt.

U.S. Debt Crossed 100% Of GDP Post-WWII Threshold

U.S. public debt has topped 100% of GDP for the first time since 1946 when the country demobilized after World War II. 

The government now spends $1.33 for every dollar collected, with debt service approaching $1 trillion annually.

Post-WWII, the U.S. inflated away debt through nominal GDP growth. Analysts argue the same playbook is inevitable now, requiring the Fed to keep rates below inflation while government spending drives nominal growth.

Incoming Fed chairman Kevin Warsh understands this dynamic.

He has stated that quantitative easing inflates asset prices while eroding wage earners’ purchasing power through inflation.

The Dollar Dominance Strategy

The administration secures dollar dominance through swap lines and stablecoin proliferation.

Brazil recently banned stablecoins for cross-border payments, citing threats to monetary sovereignty as citizens abandon the real for dollars.

Countries accustomed to dollar transactions welcome stablecoins. Those trying to maintain independent monetary policy fight back, but the U.S. holds leverage through swap lines and Treasury access.

Why Bitcoin Could Be 90% Undervalued

Bitcoin remains at roughly 5% of gold’s market capitalization despite superior scarcity. A move to parity with gold represents a 20x gain from current levels.

Pentagon involvement and inevitable money printing create conditions for sustained appreciation. Every Bitcoin narrative centers on scarcity and depreciating fiat, and neither dynamic is changing.

The administration builds its strategic reserve through seizures rather than purchases, confiscating Bitcoin from North Korea, Iran, and Russia.

Last year’s Cambodia pig butchering scam netted $15 billion in confiscated coins.

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