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Bitcoin proposed as strategic reserve to protect US budget from deflation
Cathie Wood, founder of Ark Invest, proposed using Bitcoin as insurance against what she called dangerous deflation that could engulf the global economy as artificial intelligence advances.
Wood said the decentralized nature of the cryptocurrency and its strictly limited supply make it a more reliable asset than traditional financial instruments amid rapid technological progress.
Ark Invest analysts argue that the adoption of AI will sharply reduce firms' production costs, triggering declines in the prices of goods and services. While deflation may appear positive to consumers, it poses an existential threat to governments with large debt burdens.
As prices fall, tax revenues decline, making the servicing of the United States federal debt — currently about $38.4 trillion — effectively impossible, the analysts say.
Wood urged authorities to diversify reserves in favor of Bitcoin to protect public finances from the erosion of fiat currencies. Given forecasts that US public debt could reach 175% of GDP by 2056, she warned that deflationary risks are becoming critical. In this framework,
Bitcoin is presented not merely as an alternative to gold for hedging inflation, but as a strategic reserve capable of preserving value in an era when technology makes many other goods and services markedly cheaper.
Published 19 February 2026
© InstaFintech Group
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© InstaFintech Group
