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If interest rates stay elevated, these refinancing costs could spiral, widening deficits and forcing the government to borrow even more. This "fiscal dominance trap" could instigate a debt spiral where the need to service debt outpaces economic growth, pushing the country toward a liquidity-driven crisis.

The "Everything Code": Liquidity and Bitcoin's Long-Term Outlook

At the core of this analysis is the "everything code," a term describing Bitcoin’s high correlation (0.94) with the global M2 money supply—the total cash and deposit money circulating worldwide. Historically, Bitcoin's price closely tracks liquidity cycles: when central banks ease monetary policy and expand the money supply, Bitcoin tends to rally.