Bitcoin remains about 40% below its October 2025 peak after losing momentum from an early-month rally, as traders assess the potential impact of a bitcoin exchange-traded fund catalyst and growing concerns over US debt. Technology investor Chamath Palihapitiya said a 6% yield on the 30-year Treasury bond would mark the beginning of a debt "death spiral," while fellow investor David Friedberg warned that the federal government must refinance $10 trillion over the next 12 months amid persistent inflation and higher borrowing costs. Treasury Secretary Scott Bessent has sought to reduce longer-dated bond yields, prompting Stanley Druckenmiller to argue that only lower government borrowing can durably bring yields down. Treasury data reported by Reuters showed a $432 billion federal budget deficit in July, lifting the fiscal-year-to-date gap to $1.8 trillion. BlackRock’s Robert Mitchnick said debt and deficit concerns tend to benefit assets such as bitcoin and gold. He also described bitcoin’s recent decoupling from stocks as healthy, highlighting its potential role as a portfolio diversifier and hedge against left-tail risks. BlackRock’s bitcoin ETF has accumulated almost 750,000 bitcoin worth just under $50 billion since launching in early 2024. Grayscale Research separately says Treasury bond buybacks would not resolve the core deficit and could redirect investors toward bitcoin-native assets, ETH and ZEC.