Biggest Bitcoin Catalyst Is Not the Halving: Will US Debt Drive BTC to $300,000?

Bernstein has set Bitcoin (BTC) targets of $150,000 by mid-2027 and $300,000 by 2029. The case rests on US government debt, not the halving. The biggest Bitcoin catalyst, the broker argues, now sits in the bond market.

The timing is hard to ignore. US debt crossed $40 trillion this month, and a Treasury announcement, not a crypto headline, drove bitcoin from the mid-$60,000s to about $81,200 in a week.

Why US Debt Is Now the Biggest Bitcoin Catalyst

The US officially owes $40 trillion, a record it crossed on August 19. That figure has more than doubled in a decade.

Bernstein analysts, led by Gautam Chhugani, argue in a new note that four decades of falling interest rates are over. Every rise in yields now feeds bigger deficits and heavier borrowing.

Faced with that loop, Bernstein expects Washington to pick the quieter exit. Let the currency lose value instead of cutting spending. That path favors assets no government can print, like bitcoin and gold.

The firm’s base case sees $150,000 by mid-2027 and roughly $300,000 at the 2029 cycle peak. If institutions move faster, Bernstein models $500,000 in 2029 and about $1 million by 2033.

BITCOIN COULD HIT $300,000 BY 2029Bernstein predicts Bitcoin could recover to a new record of $150,000 by mid-2027 before reaching $300,000 by 2029.The firm expects rising government debt and currency debasement to boost demand for scarce assets like Bitcoin.Bernstein also…

— *Walter Bloomberg (@DeItaone) August 26, 2026

Recent history supports the shift. Bitcoin lost about half its value after its $126,000 peak in October 2025. That was far milder than the 77% to 84% crashes of earlier four-year cycles.

The Bond Market Is Doing the Heavy Lifting

The trigger came on August 19. Treasury Secretary Scott Bessent doubled long-dated bond buybacks from $2 billion to $4 billion per operation. The 30-year yield had just hit 5.337%, its highest since 2007. It has since retraced to 5.17%.

Markets read the move as a promise of easier money. Bitcoin jumped 10% past $72,000 within hours as $1.74 billion in short bets were wiped out, the second-largest such event on record. It now trades near $78,238.

Traders call this the debasement trade, a bet that governments will dilute their money rather than cut spending. Gold just posted its best month since 1999, and copper closed at a record.

Bloomberg Senior ETF Analyst Eric Balchunas observed that the trade is starting to replace AI mania. BlackRock’s Bitcoin fund IBIT and the gold fund GLD rejoined the 10 most-traded ETFs, pushing out semiconductor funds.

Another sign the debasement trade is starting to replace AI mania: Store of value frenemies $GLD & $IBIT are back in the Top 10 most traded ETFs, knocking down some of the semiconductor ETFs, which took over the list all summer. They're still punching above weight but not nearly… pic.twitter.com/KDQvptpwHE

— Eric Balchunas (@EricBalchunas) August 25, 2026

Meanwhile, Maelstrom CIO Arthur Hayes makes the same case from the crypto side. He urged buying risk assets after Bessent’s move and sees no crash needed to start the next leg.

“I think they’re going to print early and print often … you’re going to look up and see, you know, Bitcoin at 250,000. Like what happened? There wasn’t really a financial crisis,” Hayes said in a new interview.

There is precedent, because in March 2023, a federal backstop after Silicon Valley Bank collapsed calmed markets and loosened money. Bitcoin climbed from near $20,000 then to its 2025 record.

One caution remains. CryptoQuant data shows long-term holders sold into the rally as bitcoin neared $80,000. However, US spot bitcoin ETFs just posted their strongest week of inflows in 10 months.

Whether that fresh demand absorbs the selling may decide if the debt trade carries bitcoin back above $80,000.