Bitcoin News Today: Bitcoin's Hedge Role Resurges as U.S. Debt Hits $38 Trillion

The U.S. crypto landscape is undergoing a pivotal shift as optimism returns to the sector amid a confluence of regulatory, economic, and political developments. Binance, the world's largest cryptocurrency exchange, is poised to re-enter the American market following President Donald Trump's pardon of its founder, Changpeng "CZ" Zhao, while concerns over the nation's ballooning $38 trillion national debt are fueling renewed interest in Bitcoin as a hedge against dollar devaluation.

Bitcoin's price has struggled to gain traction above $109,100, with on-chain analytics firm Glassnode warning that a drop below key support levels could push the asset toward $97,500. The firm highlighted that short-term holders (STHs)—investors who purchased Bitcoin within the past 155 days—are currently underwater, a sign of potential capitulation that historically precedes mid-term bearish phases. Meanwhile, the broader market is watching Binance's potential U.S. comeback with cautious optimism. Trump's pardon of Zhao, who was convicted of money laundering in 2023, has reignited debates about regulatory fairness and political influence, as reported by MarketWatch. Binance, which was banned from operating in the U.S. in 2023, now faces a complex path to reintegration. While some industry leaders, including CoinRoutes CEO Ian Weisberger, argue that Binance's return could democratize access to deep liquidity and derivatives products, critics like Santa Clara University professor Seoyoung Kim caution that regulatory hurdles with the SEC and CFTC remain significant.

The political ramifications of the pardon have also drawn sharp criticism. Democratic Senator Elizabeth Warren accused the administration of compromising judicial integrity, citing Binance's financial ties to Trump's family through a stablecoin venture. Meanwhile, Zhao himself has expressed confidence in crypto's role in the U.S. economy, tweeting that the sector will "make a lot of money for the country," according to Yahoo Finance.

Amid this regulatory uncertainty, the U.S. national debt crisis is amplifying demand for alternative assets. According to Treasury data, the U.S. national debt has surged past $38 trillion, with interest payments projected to reach $1.8 trillion annually by 2035. The Congressional Budget Office warns that without policy interventions, the debt-to-GDP ratio could hit 156% by 2055, exacerbating inflationary pressures and eroding purchasing power. This fiscal trajectory has reignited discussions about Bitcoin's utility as a hedge. Proponents, including BlackRock's Larry Fink, argue that Bitcoin's fixed supply of 21 million coins makes it uniquely positioned to counteract dollar devaluation. Historical correlations between liquidity expansions and Bitcoin rallies—such as the 2020 stimulus-driven surge to $60,000—further bolster this narrative, as noted by CoinEdition.

However, skeptics remain unconvinced. Financial commentator Peter Schiff and economist Nouriel Roubini argue that Bitcoin's volatility and speculative nature disqualify it as a true safe-haven asset. The recent $700 million in crypto liquidations underscores the sector's susceptibility to market swings. Yet, institutional adoption is gaining momentum, with major firms like T. Rowe Price and VanEck filing for crypto ETFs, signaling a shift toward mainstream acceptance, a point also highlighted by CoinEdition.

The interplay between Binance's potential U.S. reentry, regulatory scrutiny, and the national debt crisis highlights the crypto market's evolving role in a fractured financial ecosystem. While challenges persist—ranging from political backlash to technical hurdles—the confluence of factors is creating a fertile ground for innovation and investment. As the Trump administration touts policies to curb deficits and stabilize the dollar, the crypto community watches closely, betting on a future where digital assets play a central role in reshaping global finance.