In a recent article published in Foreign Affairs on August 19, 2025, Harvard economist Kenneth Rogoff discussed the potential benefits of cryptocurrencies like Bitcoin in the event of a U.S. debt crisis. Rogoff argued that if the U.S. were to face such a crisis, it would likely be very good for Bitcoin, as the cryptocurrency could serve as a hedge against economic instability and fiat devaluation. His comments come amid growing concerns over America’s escalating public debt, now nearing 100% of national income, and the potential erosion of the dollar’s global reserve status.
With Bitcoin trading at approximately $113,846 as of August 22, 2025, Rogoff’s analysis suggests that money printing to manage debt could drive demand for Bitcoin as an alternative asset. Let’s break down his statement, the context, and what it means for the crypto market.
Key Highlights from Rogoff’s Article
In “America’s Coming Crash: Will Washington’s Debt Addiction Spark the Next Global Crisis?”, Rogoff outlined several points on how a debt crisis could favor Bitcoin:
- Debt Crisis Scenario: Rogoff warned of rising skepticism among investors about U.S. Treasury debt safety, which could lead to higher interest rates and complicate debt management. He noted, “With the United States taking on such extraordinary levels of debt, the dollar no longer looks unassailable.”
- Bitcoin’s Role: He suggested that in a crisis, cryptocurrencies like Bitcoin could benefit from increased demand as a store of value, particularly if money printing accelerates. While focusing on stablecoins as a tool for routing funds into Treasury debt, Rogoff implied that Bitcoin’s scarcity makes it a strong alternative during fiat instability.
- Broader Implications: Rogoff discussed how digital assets could help manage high debt levels, providing a “backdoor” for channeling savings into government debt through stablecoins, but Bitcoin’s independence from fiat systems positions it favorably in a crisis.
Rogoff’s views represent a shift from his 2018 prediction that Bitcoin was more likely to drop to $100 than hit $100,000, admitting he underestimated its resilience.
Why a Debt Crisis Could Be Good for Bitcoin
Rogoff’s analysis is rooted in several economic factors:
- Money Printing and Inflation: In a debt crisis, the Fed might resort to quantitative easing, devaluing the dollar and driving investors to Bitcoin as a hedge, similar to gold.
- Dollar’s Vulnerability: With U.S. debt at $37 trillion, Rogoff warns of reduced foreign demand for Treasurys, eroding the dollar’s status. Bitcoin, with its fixed 21 million supply, could attract capital fleeing fiat instability.
- Crypto’s Resilience: Rogoff notes Bitcoin’s growth despite regulatory hurdles, suggesting it thrives in uncertainty, as seen in past crises like 2008.
- Global Trends: Nations like Brazil discussing a $19 billion Bitcoin reserve highlight sovereign interest, amplifying Bitcoin’s appeal.
Current Bitcoin Market Overview
As of August 22, 2025, Bitcoin is trading at $113,846, down 1.9% in the last 24 hours but up significantly year-to-date. The market is supported by:
- Institutional inflows from pension funds and ETFs.
- Regulatory progress, such as the U.S. Digital Asset Market Clarity Act and the Fed’s banking framework for crypto services.
- Global developments, including Buenos Aires accepting crypto for taxes and sovereign funds increasing exposure.
The FOMC minutes’ dovish tilt on August 20, 2025, boosts rate cut odds, benefiting risk assets like Bitcoin.
Implications for Investors
Rogoff’s comments offer key considerations for crypto investors:
- Potential Upside: A debt crisis could accelerate Bitcoin adoption as a safe haven, supporting long-term price growth to forecasts like $180,000-$200,000 by year-end.
- Volatility Risks: Short-term swings may occur, especially with today’s Initial Jobless Claims report at 8:30 a.m. ET, which could influence Fed decisions.
- Secure Practices: Use regulated platforms like Coinbase or Kraken, and store assets in hardware wallets.
- Diversification: Consider ETFs like BlackRock’s IBIT for exposure without direct ownership risks.
Final Thoughts: Debt Crisis as a Bitcoin Catalyst
Harvard economist Kenneth Rogoff’s analysis that a U.S. debt crisis would likely be very good for Bitcoin underscores the cryptocurrency’s potential as a hedge in economic turmoil. As money printing looms, investors should monitor policy developments closely.
Stay tuned for updates on Bitcoin price movements, economic indicators, and more crypto insights as this story evolves.
Disclaimer: This article is for informational purposes only and not financial advice. Cryptocurrency investments carry risks.