Macro Analyst Says US Is 'Long-Term Insolvent,' Bitcoin to Benefit

Macro analyst Lyn Alden said Tuesday on the "What Bitcoin Did" podcast that the United States is "long-term insolvent," making currency debasement inevitable and positioning Bitcoin as a rational place to allocate capital.

Alden noted that as long as bondholders expect real returns, the U.S. government's debt obligations are essentially unsustainable. Mathematically, only three possible outcomes remain:

Currency debasement — the most likely path, and bond markets are already pricing this in

Welfare system reform — politically difficult, but mathematically imperative over the long term

Defense spending cuts — possible, but unrealistic given current geopolitical pressures

She made clear this is not a doomsday declaration, but a structural projection based on the numbers for the coming years and decades.

She believes the Federal Reserve cannot solve this problem either, because its policy tools address credit-driven inflation, not the fiscal-driven inflation caused by a deficit running at 7% of GDP.

Rate hikes can slow borrowing, but do nothing to reduce the government's deficit.

Why Bessant Looks Just Like Yellen

Alden noted that Bessant has for years criticized Yellen for over-relying on short-term Treasury bills rather than issuing more long-duration bonds.

Now that he runs the Treasury himself, he is doing the same thing — and going even further by doubling the size of the buyback program without a liquidity crisis forcing it.

She called this a milder form of financial repression: the government is simply unhappy with current yield levels and steps in to manage market perception rather than address the actual market problem.

She believes this dynamic reflects what happens in emerging markets when fiscal dominance takes hold.

When the fiscal trajectory looks unsustainable, no one wants to lend long-term, and governments start issuing bonds with increasingly shorter maturities. The U.S. is far from hyperinflation, but it is showing these same characteristics in a milder form.

Why This Is Bullish for Bitcoin

Alden argues that when large institutional capital managers begin concluding that this fiscal trajectory cannot be stopped, they will reduce bond exposure and rotate into hard assets.

Bitcoin sits right on this path — it is an asset with a fixed supply that neither the Treasury nor the Fed can debase through monetary policy.

She said the fact that policymakers are now intervening even without any crisis signals that they have already embarked on a long-term currency debasement path.