Mike Novogratz, the Galaxy Digital (NASDAQ: GLXY) founder and one of crypto's most prominent macro voices, says the United States has only one realistic path out of its roughly $40 trillion d
Mike Novogratz, the Galaxy Digital (NASDAQ: GLXY) founder and one of crypto's most prominent macro voices, says the United States has only one realistic path out of its roughly $40 trillion debt pile.
Speaking with SkyBridge Capital's Anthony Scaramucci in an episode published June 13, Novogratz argued that Washington cannot grow its way out of a debt load that size.
Galaxy Digital is a New York–based financial services firm founded by Novogratz, a global leader in digital assets and data center infrastructure. Its crypto platform offers institutions trading, advisory, asset management, staking, self-custody, and tokenization technology.
It also builds AI and high-performance computing data centers, anchored by its 1.6-gigawatt Helios campus in Texas.
The company was earlier involved in Bitcoin (BTC) mining operations. However, it has completely exited the business to focus more on AI.
Related: Anthony Scaramucci unveils Bitcoin target for July
As of June 16, the total outstanding national debt of the U.S. was approximately $39.2 trillion, as per the U.S. Treasury. The debt held by the public stood around $31 trillion, while the rest was with intragovernmental holdings.
Novogratz's case is that a modest, persistent dose of inflation quietly shrinks the debt burden over time.
"We actually need inflation," Novogratz said.
Running inflation near 3% to 4% for a decade, he argued, while publicly committing to a 2% target the market still believes is one way to deal with debt.
"We could run 4% inflation for the next 10 years, but have that two [2%] target and have the markets believe we were going to get to two, we'd have 10 years of 2%, you know, whacking away at that debt, deflating it away... That's 10% or 20% in 10 years plus compounding. You'd have less net debt," Novogratz explained.
But the strategy only works if confidence holds. Novogratz warned that the real risk is policymakers losing control of that confidence when inflation runs hot, and expectations unanchor.
That scenario, he cautioned, could tip into extreme inflation that erases not just government debt but ordinary people's savings and wealth alongside it.
The line between a managed deflating of debt and a destructive spiral, in his view, is thin.
Novogratz's comments come at a time when investors and traders are looking forward to the Federal Reserve's next rate cut decisions at the June 16 and 17 Federal Open Market Committee (FOMC) meeting. This will also be the first FOMC meeting for new Fed chair Kevin Warsh.
For crypto investors, debasement arguments like Novogratz's sit at the heart of the Bitcoin-as-a-hedge thesis. If the dollar's value is deliberately eroded, scarce assets become more attractive.
That dynamic played out in May 2025, when Moody's stripped the U.S. of its last AAA credit rating over its ballooning debt.
Rather than selling off, Bitcoin maintained its resilience around $104,000, as investors treated deteriorating U.S. fiscal credibility as a tailwind for digital assets.
A similar story is playing out in crypto-friendly Argentina, where chronic high inflation has pushed citizens into crypto as a savings tool. Inflation hit roughly 292% in 2024 before receding to about 36% by mid-2025.
As the peso lost value, households turned to Tether (USDT) and other dollar-pegged stablecoins to preserve purchasing power. In 2025, a report by Fireblocks mentioned that nearly 62% of all crypto activities involve stablecoins.
Related: Analyst says 'sticky inflation' could be bad for Bitcoin
