US Debt Hit $40 Trillion. So Where Is Bitcoin’s Debasement Trade?

US federal debt surpassed $40 trillion, yet Bitcoin has not performed as a straightforward "debasement" trade. Short-term forces—Federal Reserve tightening, dollar strength, risk-off market sentiment, and crypto-specific regulatory and liquidity constraints—have outweighed narratives about fiscal debasement. Consequently, Bitcoin is behaving more like a rate- and liquidity-sensitive risk asset than an immediate inflation hedge. The implication is that while Bitcoin retains potential as a long-term store of value against monetary debasement, its effectiveness is timing-sensitive and contingent on monetary-policy and market-liquidity cycles.