The nations of the world have taken on more debt in recent years than ever before. In comparison, Bitcoin’s market capitalization seems tiny.
Since Q1 2017, the world’s debt has exploded from $225.2 trillion, to $296 trillion, in Q2 2021, an increase equivalent to $70.5 trillion – the equivalent of 71.3 times Bitcoin’s market cap (with a market cap of $988 billion as of October 6).
So, in just four years, the world has taken on over 71 times Bitcoin’s market cap in debt. The Corona crisis in particular has pushed many major economies to pump massive amounts of money into the markets.
Meanwhile, the issue of debt is more topical than ever. For weeks, media around the world have been reporting on the possible global consequences of a bankruptcy of the real estate giant Evergrande, which has accumulated a mountain of debt amounting to 300 billion US dollars. In addition to the highly indebted construction company from China, one topic in particular has been explosive: the possible shutdown in the USA. This has been averted for the time being by an agreement reached by the US Senate. Does that mean the all-clear should be sounded? No. Because a far more sensitive issue is still open: the raising of the statutory debt ceiling.
Janet Yellen, Secretary of the Treasury of the United States of America, has been warning for weeks that if the debt ceiling of currently 28.4 trillion US dollars is not raised, the USA will face an unprecedented crisis. The debt ceiling is likely to be raised eventually, based on historic decisions by the Senate. But this will only address the symptoms of the debt problem; the causes remain deeply embedded in the global economy.
Yet one country in the world in particular was responsible for much of the debt incurred: the United States. No other country in the world has accumulated so much debt in recent years. Especially during the term of office of the controversial former president Donald Trump, from 2017 to 2021, an unprecedented amount of debt was taken on.
term in office: 7.8 trillion USD in new debt
During Trump’s term in office, a total of 7.8 trillion USD in US government debt was taken on
– approximately 7.9 times the entire market capitalization of Bitcoin.
Donald Trump planned to achieve the opposite during his term in office, namely the reduction of all US government debt. This is according to a 2016 interview with the Washington Post. At the time, Trump was overly confident that he could eliminate the national debt.
ulden could repay in just eight years. However, the upper chart shows the opposite: The debt exploded during his tenure
. In comparison, the Bitcoin market capitalization (source: CoinMarketCap).
Bitcoin Compared to US Student Loans
2021. The total amount of all U.S. credit card debt is also currently around $1 trillion.
National Student Loans since 2003 (Source: Educationdata.org).
In addition to U.S. credit card debt, another mountain of debt in the U.S. is symptomatic of the state of the U.S.: student loans. The total of all national student loans in the U.S. was a horrendous $1.767 trillion as of October 2, 2021, far more than the market capitalization of Bitcoin and nearly as much as the entire crypto market.
By comparison, in 2003, not even twenty years earlier, US national student loans were just $330 billion. By 2013, they had risen to just under $1 trillion – a 300 percent increase, in just 10 years. And if this growth continues, student loans in the U.S. should soon crack the $2 trillion mark. For comparison, Germany’s national debt also shows just how high that amount of loans alone is. For this amounted to 2.61 trillion US dollars (or 2.251 trillion euros) on 29 June and according to data from Destatis
To note: The world’s debt mountain has never been higher and is many times larger than the market capitalization of Bitcoin. Overcoming the debt problem is likely to become one of the biggest obstacles for the nations of the world in the coming years. After all, if nations fail to get a handle on the problem, the debt bubble is in danger of bursting.