Bitcoin News Today: Bitcoin Price Surge Drives Stablecoin Growth, Bolstering U.S. Fiscal Stability

Mallers' analysis centers on the interplay between Bitcoin's price and U.S. fiscal policy, framing the cryptocurrency's appreciation as a structural necessity for sustaining stablecoin growth and, by extension, government debt demand. He highlighted the GENIUS Act as a catalyst for this dynamic, arguing that stablecoins—particularly Tether—act as conduits for Treasury financing. By displaying a comparative chart of Tether’s market capitalization and Bitcoin’s price, he emphasized that stablecoin expansion is contingent on Bitcoin’s upward trajectory: “If you want stablecoins to grow, Bitcoin grows.” This relationship, Mallers claimed, creates a feedback loop where rising Bitcoin prices incentivize stablecoin issuance, which in turn amplifies purchases of U.S. Treasuries, as stablecoin reserves are heavily allocated to government debt [1].

The U.S. fiscal situation, according to Mallers, is characterized by a “trap” where traditional policy tools—interest rate hikes or spending cuts—are no longer viable. He argued that the only remaining solution is a controlled devaluation of the dollar, directed strategically against assets like Bitcoin and gold rather than everyday goods. This approach, he contended, would allow the government to maintain political and economic stability while managing its debt-to-GDP ratio of 130%. “Debase the dollar all you want,” he asserted, suggesting that Bitcoin holders would accept currency erosion if their digital assets appreciate in value [1].

Mallers outlined a hypothetical scenario in which Bitcoin reaches $500,000—a fivefold increase from its current level of approximately $118,055—triggering a proportional surge in stablecoin capitalization. Such growth, he claimed, would generate five times the demand for U.S. Treasuries, a critical need as traditional buyers like China and hedge funds increasingly disengage from the debt market. In this context, the Federal Reserve would become the “buyer of last resort,” echoing historical precedents such as the Fed’s wartime-era balance-sheet expansion, which saw its holdings of T-bills multiply tenfold [1].

The analysis extended to policy implications, including the proposed integration of Bitcoin into retirement accounts. Mallers suggested this would enable policymakers to offset dollar devaluation by channeling inflationary pressures into assets held by crypto investors. He referenced recent political developments, such as a reported $2 billion Bitcoin purchase by the U.S. president’s family and initiatives to open retirement markets to crypto investments, as evidence of a broader strategy to align fiscal policy with digital asset growth [1].

Critics have raised questions about the feasibility of Mallers’ projections, noting that Bitcoin’s volatility and speculative nature pose risks to the stability of the U.S. financial system. However, the growing institutional adoption of digital assets and the Federal Reserve’s evolving role in monetary policy suggest that the interplay between crypto and traditional finance will remain a focal point for policymakers and market participants alike [1].

Source: [1] [Higher Bitcoin Price Now Critical For US Fiscal Stability](https://www.newsbtc.com/bitcoin-news/higher-bitcoin-price-critical-for-us-fiscal-stability/)