NDV: Bitcoin, the Core Asset in the Era of Dollar and Bitcoin Overissuance

Author: Jason, NDV Research Observation

On August 18, the U.S. national debt surpassed $40 trillion, a few months earlier than expected. This news only lingered for a day in financial sections.

We believe it is worth interpreting as a signal of a decade. The argument of this article can be summarized in one sentence: The mathematics of U.S. debt has reached a stage where it can only be solved through "devaluation" (as calculated by official institutions); historically, the winners on this path have always been scarce assets; gold has completed its repricing, becoming the largest reserve asset for global central banks, while Bitcoin—under the same logic, a younger and scarcer asset—has a market value only 5% that of gold. The core anti-devaluation asset for the previous generation was gold, while this generation has Bitcoin added to the list of candidates. We have verified the tradability of this judgment with three and a half years of fund net value.

This story will unfold over many years, and we will track every milestone here.

1. Clarifying the Term "Insurance"

When buying fire insurance, there is no need to predict which day a fire will occur. You only need to confirm three things: the house is important, the fire source exists, and the premium is relatively cheap compared to the risk.

This article argues these three points—

• House: The purchasing power of your assets. It is priced in dollars, and the credit of the dollar is built on U.S. fiscal strength;
• Fire Source: The mathematics of U.S. debt has entered a stage where it can only be solved through "devaluation"; this is not an opinion, but a calculation made by official institutions;
• Premium: Among the assets hedging this situation, gold has been repriced, while Bitcoin is still lying on the floor—making the premium unusually cheap.

Another thing that insurance history has repeatedly proven: when enough people buy an insurance policy, it ceases to be insurance and becomes a core asset. Gold has just completed this transformation, and Bitcoin is on the same path. Below, we will elaborate in order, with every number in the text sourced and dated, welcome to verify each one.

2. Fire Source: An Undisputed Arithmetic Problem

On August 28, 2026, the number on the U.S. Treasury's balance sheet is $40,104,097,482,666—$40.1 trillion, approximately 123% of U.S. GDP. Over the past year, the public's holdings of U.S. Treasury bonds have increased by $2.5 trillion.

More important than the total amount is the interest. In the recently concluded fiscal year 2025, the U.S. government paid $970 billion in net interest, consuming 18.5% of all fiscal revenue—the highest since records began in 1940. To translate: for every $5 in taxes collected, nearly $1 goes to repaying interest on past borrowing.

Moreover, this problem will only move in one direction: the average interest rate on existing Treasury bonds is only 3.45%, while the 10-year yield is around 4.75%—about $10 trillion of old debt will need to be rolled over in the next 12 months, and with each batch rolled, the interest cost will rise. According to the Congressional Budget Office (CBO) own forecasts, net interest for fiscal year 2026 will exceed $1 trillion for the first time, reaching $2.1 trillion by 2036.

Here is a set of comparisons worth looking at together: the supply of U.S. Treasury bonds increases by $2.5 trillion a year, with no upper limit; Bitcoin's supply is capped at 21 million coins, halving every four years. On one side is an unlimited supply determined by politics, and on the other side is absolute scarcity determined by code—the difference between these two supply curves forms the foundation of the entire argument.

3. Why Cutting the Budget Won't Work: Mathematically Infeasible

Many people's intuition is: just spend less.

Mathematically, this is not allowed. According to the Bipartisan Policy Center (BPC) based on CBO data, starting in 2025, U.S. mandatory spending (Social Security, Medicare, etc.) plus interest will be approximately equal to all fiscal revenue—every dollar Congress can actually vote on, including all defense spending, is borrowed.

The political reality is that both parties are adding up: the large fiscal bill (OBBBA) passed in July 2025 is projected by the CBO to increase the deficit by $3.4 trillion over ten years; in February 2026, the Supreme Court ruled that large tariffs were overreaching, eliminating the government's only significant new source of revenue and requiring a repayment of $166 billion. This year's deficit is estimated at $2.1 trillion—during peacetime and full employment, the deficit accounts for 6% of GDP.

For the next decade, this fire has an official schedule, with authoritative sources for each stop:

• 2027: Debt ceiling reaches $41.1 trillion again (BPC/CRFB)
• 2028-2030: Debt-to-GDP ratio exceeds the historical record of 106% during World War II (CBO)
• 2029: Global public debt exceeds 100% of global GDP, one year earlier than originally estimated (IMF)
• 2032: U.S. Social Security Trust Fund depletes under current law, automatically cutting benefits by 22% (2026 official Trustees report)
• 2033: Medicare hospital fund depletes, automatically cutting hospital payments by 11% (same report)
• 2036: Debt-to-GDP ratio reaches 120%, net interest $2.1 trillion (CBO)

This is the reason for "worth betting on for ten years": there is no need to gamble on which year something will happen; the official timeline shows that every year in the next decade is moving closer in one direction. The roadmap for rising premiums is printed by the government itself.

4. The Only Way to Extinguish the Fire, Historically Proven

When debt is so high that it cannot be repaid, theoretically there are three doors: default, true austerity, or diluting through inflation. Reserve currency countries will not choose the first door, and the second door has already been proven to be non-existent. Only the third door remains, known as financial repression: keeping interest rates below inflation, allowing bondholders and depositors to quietly lose some purchasing power each year under the illusion of "not losing money in nominal terms."

The last time the U.S. reached this position was in 1946, with debt at 106% of GDP—almost the same as today. The solution at that time: the Federal Reserve pegged short-term Treasury bond rates at 0.375% and capped long-term rates at 2.5%, maintaining this for nine years; during the same period, inflation averaged about 6.5%. By 1974, the debt-to-GDP ratio fell from 106% to 23%. Academic calculations (Reinhart & Sbrancia) show that the U.S. and U.K. cleared debt equivalent to 3-4% of GDP each year through negative real interest rates—this money did not disappear but was transferred from savers' pockets. The U.K. was even harsher: reducing from 270% to 50%.

Economic historian Russell Napier bluntly states: "Financial repression is slowly taking money from savers and the elderly. 'Slow' is important—it needs to be slow enough that the pain isn't too obvious."

Looking back at the precedent of 1971: after Nixon closed the gold window, in the following decade, the gold price rose from $35 per ounce to $850 in 1980. Every time the monetary system is forced to "reset," scarce assets undergo a repricing. This is not the first time; it is just this generation's turn.

If you think these are still history books, consider last week's news: in August 2026, the U.S. Treasury doubled the size of its long-term Treasury bond repurchase to $4 billion in an attempt to suppress long-term yields; legendary trader Stanley Druckenmiller immediately published a signed article in the Wall Street Journal—"This is not liquidity management; this is price management." Three days later, the Treasury Secretary publicly rebutted at the G20. Both sides are now in the game. Financial repression is not a prophecy; it is happening news.

5. Gold: The Entire Process of an Insurance Becoming a Core Asset Just Unfolded Before Our Eyes

Before fire insurance prices rise, who acts first? The most informed and conservative investors in the world—central banks.

Since 2022, global central banks have been buying gold continuously for four years at a scale of 850-1,100 tons per year, about twice the average level of the previous twelve years; in the second quarter of 2026, when gold prices underwent a deep correction, central banks bought 289 tons in a single quarter, setting a historical record for the second quarter—buying more as prices fall.

The result is a historic seat change: according to the European Central Bank's June 2026 report, gold accounted for 27% of global central bank reserves, surpassing U.S. Treasury bonds (22%) for the first time in history, becoming the largest single reserve asset.

Please note the narrative weight of this event: gold has transformed from a "marginal hedge" in portfolios to the top seat in the official reserve system in less than five years—this is the complete process of an insurance becoming a core asset, played out by global central banks before everyone's eyes. The price of gold is a footnote: +27% in 2024, +65% in 2025 (the best since 1979), and in January 2026, it reached a historical high of about $5,590. The mechanism has also changed—the negative correlation between gold prices and U.S. real interest rates, maintained for nearly twenty years, failed after 2022, as marginal buyers shifted from Western funds that look at interest rates to sovereign nations that do not.

Gold tells this debt story, and its transformation has already completed more than half.

6. Bitcoin: The Asset Halfway on the Same Path

From early 2025 to today: gold is up about +80%, while Bitcoin is down about -20%. The same story of currency devaluation, two pricing methods, with a difference of about 100 percentage points. The amount of gold that one Bitcoin can exchange has compressed from over 30 ounces to about 16 ounces—this is the lowest relative price of Bitcoin to gold on record.

Some say this means the market has chosen gold and eliminated Bitcoin. History offers another version: from 2019 to 2020, gold reached a new high first (in August 2020), while Bitcoin lagged by four to seven months before starting up, then catching up with a larger margin. The reason is simple—central banks have established channels to buy gold, while large funds have only recently repaired compliance channels to buy Bitcoin.

Three latest signals:

• Attributes are changing: The 90-day correlation between Bitcoin and gold has surged past 0.5 (close to historical highs), while the Nasdaq has dropped from over 60% to 33%—it is transitioning from a "high-volatility tech stock" to a "hedge against sovereign debt fears" (Grayscale, August 2026);
• Capital is beginning to rotate: Bitcoin rose about 25% in August, marking the first increase in August since 2021; during the last week of August, a total of $7 billion flowed into gold and Bitcoin funds, setting a record for a single week;
• The catalyst comes directly from the debt narrative: The trigger for the August surge was the Treasury's intervention to suppress yields and the White House's statements regarding strategic reserves—transmission mechanisms are now in place.

7. Why This Pullback Is Not Like 2018 or 2022

After peaking in October 2025, Bitcoin has dropped about 54%, leading many to view it as another "crypto crash." The data does not support this:

The maximum drawdowns in the previous three bear markets were -86%, -84%, and -78%, while this one is -54%—each round has been shallower. Long-term holders have locked in 83% of the circulating supply (a historical high), and the one-year realized volatility has dropped to multi-year lows, approaching levels seen in large tech stocks. The holder structure has changed, and the asset is maturing.

More importantly, during the year and a half of price declines, it has coincided with the fastest institutional pipeline developments: legislation for stablecoin federations (GENIUS Act) has taken effect; the market structure bill (CLARITY Act) is set for a Senate vote in mid-September; bank custody has received regulatory approval; an executive order to include alternative assets in 401(k) plans has been signed; and a strategic reserve framework has been established. The cumulative net inflow into U.S. spot ETFs has reached about $55 billion, with BlackRock's IBIT alone holding approximately 777,000 coins.

Prices are falling, but the pipeline is being built—this is typically the phase in the cycle where the most homework needs to be done.

8. How Cheap Are the Premiums: An Arithmetic Problem with Heavyweight Endorsements

Bitcoin's total market cap is about $1.58 trillion, only 5% of gold's.

It does not need to "replace" gold—just capturing a fraction of gold's market cap would provide multiple times the upside (scenario analysis, not a prediction). The demand-side gap is glaringly clear:

• BlackRock's official white paper states that a 1-2% allocation to Bitcoin in a multi-asset portfolio is a "reasonable range," calling it a unique diversifier;
• Bridgewater founder Ray Dalio (July 2025) stated: "For optimal risk-return portfolios, about 15% should be in gold or Bitcoin." He publicly mentioned that he allocated about 1% and reiterated in August 2026: sell bonds, buy gold and Bitcoin, with a debt crisis window of "three years, fluctuating two years";
• Paul Tudor Jones (April 2026) stated: "Bitcoin is undoubtedly the best hedge against inflation—better than gold."
• BlackRock CEO Larry Fink warned in his annual letter to investors: if the U.S. cannot control its debt, the dollar's status as a reserve currency may be overtaken by digital assets like Bitcoin.

In reality, global institutions' actual allocations are less than even 1%—sovereign funds have a few hundred million, prestigious university endowments have one hundred million, and most institutions are close to zero. The gap between the "reasonable range" and "actual holdings" represents structural buying pressure for the next few years: the global institutional capital pool is about $200 trillion, moving just 1% would mean $2 trillion, exceeding Bitcoin's current total market cap.

There are precedents: the launch of the gold ETF (GLD) in 2004 opened up compliance channels, and gold prices rose about 330% over the next seven years. Bitcoin's ETF is set to launch in January 2024. This same movie is currently about 30 minutes in.

For the past two years, everyone has been talking about AI—I agree that it represents a decade-level productivity revolution. But looking at the level of capitalization: the market cap of the seven tech giants in the U.S. has increased by about $6 trillion over two years, and in 2026, the capital expenditure of just five major cloud companies on AI will exceed $800 billion; meanwhile, the equally important narrative of currency depreciation, supported by theory (an 80-year debt cycle), official data (CBO interest path), and real assets (central bank gold purchases), shows that flagship assets have a total market cap of only $1.58 trillion. The two major transactions of this decade are one betting on productivity and the other on the monetary system—most people's portfolios only contain the first. The asymmetry lies not in the viewpoints but in the positions.

9. Presenting the Counterarguments

Any bet worth making must first pass the counterargument test:

"The debt narrative has already been priced in by gold." This is possible. So we write down a falsification line: if gold continues to reach new highs while Bitcoin's ratio to gold breaks down again, it indicates that the logic of catch-up is wrong, and we will retreat according to discipline.

"Bitcoin may continue to fall in the short term." This is entirely possible. Most sell-side analysts believe the bottom is between September and December 2026, with pessimistic scenarios suggesting $40,000-$50,000. No one can accurately time the bottom—what can be done is to confirm the cycle position, control the downside, and hold exposure during the window.

"When the crisis truly arrives, Bitcoin will first fall with risk assets." This was the case in 2022. In the first phase of liquidity shock, it fell with risk assets, and only in the second phase was it repriced as a scarce asset—this is precisely why insurance also requires risk control and structure, rather than just saying "hold on tight."

There’s also a harsh truth to be stated upfront: it’s normal for such assets to fluctuate 20% up or down in a month. The value of insurance will be revealed in ten years, with the cost being the bumps along the way. We are not managing volatility; we are managing paths and survival.

10. NDV: This Judgment Has Been Verified by Three and a Half Years of Net Value

Having discussed our worldview, let me introduce ourselves. The story above is not something NDV started talking about this year—it has been validated since 2023 using two funds that traversed a complete bull and bear market net value curve, verifying its tradability.

NDV (NextGen Digital Venture) was established in 2023 as a global macro hedge fund operating under Singapore's compliance framework: it only buys U.S.-listed stocks and ETFs (including Bitcoin spot ETFs and their options), does not directly hold tokens, and the fund contract specifies zero leverage constraints. We view Bitcoin as the anchor asset of this era, using traditional financial tools and discipline to express it.

The performance record of the first fund (March 2023 - February 2025, now liquidated) is public information: it was established at the market low after the FTX collapse, when Bitcoin was at $30,000, and achieved a cumulative return of about +275% over 23 months, turning $1 into $3.75, exceeding Bitcoin's performance by about 67 percentage points during the same period, and exited in an orderly manner at the top region. Data can be found in NDV's official announcements, and performance sequences can be queried on Bloomberg terminals (code LSQNEXI), as well as in related public company announcements.

The second fund launched in May 2025, with Bitcoin as the performance benchmark—we set our exam question not as "keeping up when it rises," but to outperform Bitcoin itself over a complete cycle. After three and a half years, the key numbers of this exam paper are as follows (the second phase figures are internal estimates, unaudited, with August 2026 being the estimated value*, final values subject to the manager's report):

• Throughout the bull and bear cycles: starting from March 2023, $1 continuously invested would be approximately $4.4 by the end of August 2026*; during the same period, Bitcoin would be about $2.9*, Nasdaq about $2.6*, and gold about $2.4*—all above the benchmark in bull, bear, and sideways markets;
• In the years when Bitcoin fell: by the end of August 2026, the fund recorded over 40%* positive returns, while Bitcoin was about -10% during the same period;
• Drawdown discipline: over three and a half years, the fund's net value drawdown only entered double digits twice (first phase about -16%, second phase transformation period maximum about -27%, monthly net value basis), while Bitcoin's maximum drawdown was -54%—the fund's maximum drawdown was about half of the benchmark.

The source of outperformance is not luck, but discipline and the unity of knowledge and action. Our judgment records are publicly verifiable, all time-stamped:

• In December 2025, we wrote in our monthly letter that "the opportunity cost of cash has changed," significantly reducing positions and shifting to defense—subsequently, Bitcoin fell by a third in the first half of 2026;
• In April 2026, we placed Middle Eastern geopolitical risks too high, missing that rebound—this mistake was documented in that month's letter;
• In June 2026, we wrote that "Bitcoin is likely to hit the bottom of this cycle in the next 3-6 months, and the task is to preserve ammunition for building positions"—June 30 became the lowest point of the year.

We are not always right, but every judgment, whether correct or incorrect, is recorded on paper. And one very practical point: the manager is the largest single investor in the fund—if judgments are wrong, we are the first to lose the most.

As for how to turn ten years of judgment into specific portfolios—what tools to use, at what price to do what, and how to retreat if wrong—this is not suitable for public articles. If you have plans to allocate to digital assets, meet the accredited investor standards, and comply with all applicable investment laws and regulations in your country or region, and wish to learn more about the NDV fund, please feel free to reach out. The public version of our daily judgments is continuously updated in the podcast "20 Minutes of Non-Consensus" and this account.

This content is provided for general informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online promotions, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets. Crypto assets are highly volatile and may result in loss. The availability of WEEX services, products, and related events may vary by region. You are responsible for ensuring that your participation is in accordance with applicable local laws and regulations.