Chiara Bianchi
While the U.S. national debt is officially listed at around $36.2 trillion, former Coinbase CTO Balaji Srinivasan warns that the true figure is far more staggering — and dangerous.
In a recent post on X, Srinivasan pointed to a $175 trillion total obligation, including unfunded liabilities such as Social Security, Medicare, and public pensions. These are not mere projections — they are legal commitments, despite being excluded from the government’s primary balance sheet.
According to the 2024 Financial Report of the U.S., the net present value of these future liabilities, after subtracting expected tax revenues, hits $175.3 trillion. This long-term view, based on data from agencies like the Social Security Administration and Medicare Services, reflects the nation’s deeper financial vulnerabilities.
Srinivasan, echoing Elon Musk’s recent concerns about expanding tax cuts and stimulus policies, warns that the U.S. is heading toward what he calls a “national bankruptcy”. The only way out, he suggests, may be massive money printing — a path that could severely undermine the dollar’s value.
The U.S. Dollar Is Collapsing — Fastest H1 Drop in Half a Century
In the first half of 2025, the U.S. Dollar Index plunged 10.8%, marking its worst six-month performance since the end of the Bretton Woods system in 1973.
The Bloomberg Dollar Spot Index has now fallen for six straight months, mirroring the kind of sustained decline not seen since 2017. Against key global currencies, the dollar has dropped 14.4% versus the Swiss franc, 13.4% against the euro, and over 10% against the yen and pound.
Several factors are fueling this decline:
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New trade tariffs enacted in early 2025
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The Federal Reserve’s shift toward rate cuts
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Persistent inflationary pressures
Investor confidence in the dollar is visibly eroding. According to the Kobeissi Letter, the U.S. debt-to-GDP ratio is expected to surpass 100% by the end of 2025, while central banks are actively increasing their gold and euro reserves as alternatives.
The IMF’s Q4 2024 data confirms this shift, showing the dollar’s share in global reserves shrinking to 57.4%, down from 66% in 2014.
A Fragile Economy Faces Hard Choices: Inflate or Stagnate
As the dollar weakens and federal interest payments soar, the U.S. economy is becoming increasingly vulnerable to shocks.
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Net interest payments are forecast to reach $952 billion in 2025, consuming over 18% of federal revenue.
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Imports are rising in cost, especially for energy, electronics, and industrial goods.
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Private investment is slowing due to elevated borrowing costs and supply chain disruptions.
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The trade deficit hit a record $1.2 trillion in 2024.
Meanwhile, the Federal Reserve’s tools are losing potency. Lowering rates would risk further devaluing the dollar, while tightening would slow growth even more.
The policy dilemma is becoming more severe: either print and inflate, or pay and stagnate.
Investors Turn to Bitcoin, Gold, and Scarce Assets
In the face of mounting uncertainty, Bitcoin, gold, and other limited-supply assets are gaining serious traction.
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Spot Bitcoin ETFs in the U.S. have attracted over $135 billion in under a year.
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Institutional investors — including pension funds and family offices — are now allocating to crypto.
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Bitcoin’s market cap surpassed $3.5 trillion, peaking at $111,970 in May 2025.
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Volatility has declined, and Bitcoin’s correlation with stocks and bonds has weakened, increasing its appeal as a diversified hedge.
Gold is also experiencing renewed strength. Central banks bought 1,000+ tonnes in 2024, with another 900 tonnes projected for 2025. A World Gold Council survey found that 76% of central banks plan to expand gold holdings in the next five years.
What Lies Ahead?
Unless drastic structural reforms are implemented, the U.S. may face a long era of:
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Sticky inflation
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Slow growth
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Declining global trust in the dollar
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And limited monetary flexibility
As the old financial order strains under its own weight, the world is already pivoting — not just toward crypto and gold, but toward a new framework where trust is earned, not printed.
