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Warren Buffett hates cryptocurrencies. Treasury Secretary Janet Yellen isn’t a fan and neither is Bill Gates. Ditto for scores of great economic minds who call the rise of cryptos like Bitcoin a “bubble,” and a lot worse.  

I have my doubts as well. I’ve seen too many Pets.coms in my career covering Wall Street to embrace a so-called currency that can’t even be used to buy a slice of pizza. 

What has me thinking twice, however, is what’s going on in Washington. If the cryptos are a bubble, what do we make of the US dollar, which is being debased even as I write this? 

Increasingly, investors are waking up to the reality that the massive spending in Washington won’t end well. Yes, drug deals are transacted in Bitcoin, and speculating day traders have pushed its price up 667 percent (you read that right) over the past year. 

But based on my reporting, it’s more than just a bunch of Robinhood types becoming crypto believers. Mainstream investors are also snapping it up as they become worried about inflation and the dollar. 

“World War II was the last time we had deficits like this, and the Fed intervened to keep interest rates low,” said Jason DeSena Trennert, chief executive of Strategas, a firm that provides research to large investors. “There was inflation during the war, but nowhere really to go. Investors today have a greater ability to park their money somewhere else. That’s one of the reasons you have higher Bitcoin prices.” 

Of course, you can raise taxes to plug deficits that have grown to more than $3 trillion and are heading to $4 trillion. President Biden has plans to do that as well, even if there aren’t enough rich people alive to pay down all the pandemic-related debt we’ve issued over the last 12 months. 

Some of these trillions created a much-needed cushion for the unemployed, but a lot went to more wasteful stuff (handing checks to people with jobs). That’s why these shenanigans are creating a wall of worry — and a rush into what’s known on Wall Street as safe havens. 

Those havens used to be commodities like gold. Now they’re cryptocurrencies like Bitcoin. A key point of attraction for the latter, according to some, is that Bitcoins are difficult and costly to mine, and there is a set number that can ever be mined — 21 million, versus the 18.6 million currently in existence. 

Compare that to dollars, which are getting printed by the Fed with no end in sight as it scrambles to prop up growth and paper over deficits.

Things are poised to get worse. Dems possess a tenuous control of Congress. Their window for doing big things will likely end next year because, if history is any guide, the party holding the White House loses House seats in the midterms. 

That’s why Biden, Chuck Schumer and Nancy Pelosi are gearing up for another splurge — a $3 trillion infrastructure bill that takes care of party priorities (renewable energy, electric cars) while building a few roads and bridges. 

That’s on top of the $1.9 trillion already spent on so-called stimulus. Without some help from the Fed, you could get a vicious cycle: higher interest rates, wider deficits and soaring borrowing costs for the US government, and still higher rates when the government issues more debt to plug the shortfalls. 

To suppress these costs, market experts like Trennert say Fed Chairman Jerome Powell could suppress interest rates on longer-dated debt. He’d do that by printing more money — buying more bonds to keep rates lower. 

Powell has intervened plenty during the pandemic to support the economy, the markets and the banking system. He has said he doesn’t want to engage in direct interest-rate suppression as it could signal a lack of fiscal stability in the US (one reason the dollar has remained relatively strong). His term ends early next year and investors are betting he will have to come on board — or the Biden administration will replace him with someone who will. 

To be sure, this scenario hasn’t yet caused a run on the dollar, which is still the reserve currency, meaning it is used as a store of value by central banks around the world because of its perceived safety.

And while interest rates are creeping higher because of all the spending, they’re still not as high as they were a decade ago — the last time the federal government and Federal Reserve inflated their way out of a crisis (see the 2008 banking collapse). 

But a big part of the crypto bet is that trouble is on the way. World War II deficits were paid for by a booming economic engine that ruled a world that needed our products. That’s no longer the case. Now, China’s economy is back at pre-pandemic levels, and it may lose its appetite to finance our debt. 

Again, I don’t know if I’ll ever be a crypto believer despite ways to buy whole pizzas with Bitcoin, now. The bubble could be popped tomorrow with an act of Congress making it illegal. 

But many smart investors are betting that cryptos or some other safe haven like it are here to stay — courtesy of Joe Biden, Jerome Powell and a Congress that thinks money really does grow on trees.

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