US Budget Deficit Reaches $1.798 Trillion, Bitcoin Hedge Theory Under Scrutiny

As of the end of July, the cumulative budget deficit for the U.S. for the fiscal year 2026 has increased to $1.798 trillion. This has brought renewed attention to the theory of Bitcoin (BTC) as a hedge against currency devaluation. In July, the federal government deficit was $432.31 billion, with the cumulative deficit increasing by 10.46% compared to the previous year. Total expenditures were recorded at $6.284 trillion, while revenues amounted to $4.485 trillion. The Congressional Budget Office (CBO) projects a federal budget deficit of $1.9 trillion for the fiscal year 2026, and the current cumulative deficit is approaching this figure. BTC is considered a relatively scarce asset as its issuance is capped at 21 million coins, making it valuable when the value of fiat currency is diluted. However, high inflation and interest rates could pose challenges for BTC. According to recent reports, BTC remains under pressure from high risk-free rates and real interest rates, and if the 10-year real interest rate stays at 2.4%, investors can earn returns without taking on cryptocurrency risks. While the expanding budget deficit could impact BTC prices, it is difficult to definitively conclude BTC demand based solely on a single fiscal figure. Changes in U.S. fiscal and monetary policy may also affect domestic investors.