BitGo CEO Belshe: The Dollar Will Eventually Go to Zero
BitGo CEO and HTTP/2 drafter Mike Belshe wrote after referencing a U.S. budget interpretation for August: the dollar is heading to zero. The referenced content states that personal and corporate income taxes will yield about $3 trillion for the year, while debt interest expenses will reach about $1.3 trillion.
The Treasury Department's monthly data released on Friday showed a deficit of $167 billion for August, down from $345 billion in the same month last year and below the market estimate of about $404 billion. Spending for the month was $527 billion, with revenues at $360 billion; personal income tax contributed about $179 billion, and social security and retirement contributions were about $141 billion. The cumulative deficit for the fiscal year up to August is approximately $1.966 trillion to $1.97 trillion, exceeding the full-year estimate of $1.775 trillion for 2025. After calendar adjustments, the August deficit is about $248 billion, slightly up by $7 billion year-on-year.
Interest is the core subject of debate. The net interest for August was about $86 billion, with interest expenses adjusted for inflation being about $14 billion lower year-on-year; Treasury officials pointed out that interest has still increased by about $143 billion, or about 13%, year-on-year for the fiscal year to date. The debt service table from the Bureau of Fiscal Service records the federal debt interest costs managed by the Treasury as approximately $1.252 trillion as of August 31. The Congressional Budget Office (CBO) projects net interest for fiscal year 2026 to be in the range of about $1.0 trillion to $1.2 trillion, projecting it to reach about $2.1 trillion by 2036, accounting for about 4.6% of GDP. Publicly held debt is expected to be about $30.2 trillion by the end of fiscal year 2025, with tradable and related measures reaching about $32 trillion by the end of August 2026.
The $3 trillion on the revenue side is closer to annualized or the past twelve months of personal and corporate income taxes, rather than total federal revenue. As of July, personal income tax totaled about $2.369 trillion, and corporate income tax was about $293 billion; over the past twelve months, personal income tax was about $2.821 trillion, and corporate income tax was about $358 billion, totaling over $3 trillion. Total federal revenue for 2025 is about $5.23 trillion, with personal income tax contributing about $2.656 trillion. Corporate tax is expected to decline significantly year-on-year for fiscal year 2026, related to the reconciliation bill expanding investment deductions; tariffs initially surged but fluctuated due to refunds, with net tariff revenue for August at about $12.8 billion and refunds for the month at about $10.5 billion.
This is not the first time Belshe has interpreted fiscal numbers as currency devaluation. He calculated that if compounded at a 2% inflation target since 1970, the loss of purchasing power would be about 67%; with an actual average of about 3.92%, the loss would be about 88%. He describes this as the mechanism of a K-shaped economy—those with assets keep up, while those holding cash fall behind by about 11% to 20% every six years. His company operates on the side of stablecoin custody, with a narrative that aligns with "interest eating away at income tax": fiat currency is treated as a claim that will be diluted at the speed of policy.
The market mechanism is the rollover of government bonds. The buy side consists of the Treasury that must roll over maturing debt and official accounts that have been announced to purchase domestic debt; the sell side consists of holders of old debt being repriced at higher coupon rates. Funds flow from income tax and tariffs into the general account, with a significant portion immediately flowing to creditors. Beneficiaries are institutions holding floating or newly issued government bonds; those under pressure are cash balances and wage accounts not linked to assets. The event-driven factor is the release of the August monthly report, where interest continues to rise year-on-year, and the monthly accrual temporarily falls, being framed as "annual interest of $1.3 trillion against income tax of $3 trillion."
The CBO still projects the 2026 deficit to be about $1.9 trillion, accounting for about 5.8% of GDP. Belshe reads the same table as a timeline for the unit purchasing power to reach zero, rather than a profit and loss for a specific month.
Source: Public Information
ABAB AI Insight
Mike Belshe's career path shapes how he interprets the monthly report. He was involved in HTTP/2 and later led BitGo, creating a parallel track for custody and stablecoin settlement in dollars. His reaction to the budget is not merely that "the deficit has widened by a few points," but rather he frames the ratio of interest to income tax as a failure of currency units. The net interest for fiscal year 2025 has crossed $1 trillion for the first time; by the end of August 2026, the Treasury's interest costs are about $1.25 trillion. This curve and his repeated calculations of the 2% target compounding are the same argument: debt repayment does not require default, only a dilution of the nominal dollar.
The capital path is borrowing new to repay old plus the inflation target. The Treasury continues to issue bonds, and interest rate resets replace old low-interest debt with higher coupon rates; part of the demand comes from official buybacks. Income tax remains the largest single source of revenue, but it is increasingly being preempted by interest. The reconciliation bill has pushed corporate tax cash down, and tariffs initially acted as a patch before being returned due to refunds. Stablecoins absorb overseas demand for "still redeemable for dollar assets" within this structure, and Belshe's company earns custody fees, not the coupon of government bonds themselves.
The analogy is post-World War II financial repression, 1970s inflation dilution, and residents of Argentina and Turkey fleeing to stablecoins. The U.S. still holds reserve currency status and a deep debt market, so it will not replicate those nominal exchange rate collapses in the short term; the CBO pushes debt/GDP towards a long-term 175% using sustainable rollover assumptions. The industry position is controlling the interest rate path: whoever can keep real interest rates below inflation determines the speed of dilution. Crypto custody is merely a bypass account outside this repression.
Structural change is the transfer of pricing power. The mechanism is that the real repayment of sovereign debt increasingly relies not on primary surpluses but on inflation targets and yield curve management. Once income tax becomes a coverage indicator for interest, the pricing power of the dollar shifts from trade settlement habits to who can endure nominal repayment. Units may not go to zero, but purchasing power can be designed to decline year by year.