According to asset management firm VanEck, a strategic Bitcoin reserve may assist the United States in reducing its national debt by 35% over the next 25 years. The firm suggests that acquiring 1 million Bitcoins, as proposed by Senator Cynthia Lummis, might result in huge financial gains.
VanEck predicts that Bitcoin will rise at a 25% compounded annual growth rate (CAGR), reaching $42.3 million per coin by 2049. Simultaneously, VanEck predicts a 5% compound annual growth rate (CAGR) for the national debt, propelling it from $37 trillion in 2025 to $119.3 trillion in 2049. Under these conditions, a Bitcoin reserve could cover $42 trillion in debt, accounting for 35% of total liabilities.
This optimistic scenario estimates that Bitcoin’s price would start at $200,000 in 2025, representing a significant increase from its current trading price of roughly $95,000. If Bitcoin achieves its anticipated growth rate, it may account for 18% of global financial assets by 2049, up from 0.22% today.
New political leadership and increased interest in the potential of cryptocurrency to transform global banking have bolstered the idea of a Bitcoin reserve. According to the suggested strategy, the US could use its present holdings of 198,100 Bitcoins from asset seizures to acquire additional Bitcoins through tactics such as selling portions of its $455 billion gold reserves. These methods may avoid the need for taxpayer support or the printing of new money.
VanEck also discusses how Bitcoin’s acceptance by US institutions, enterprises, and state governments could accelerate its growth. Furthermore, the firm cites potential global effects, such as the BRICS nations (Brazil, Russia, India, China, and South Africa) increasingly embracing Bitcoin as a trade settlement currency to avoid dollar-based restrictions.
Skeptics have met this lofty vision with skepticism. Some skeptics question the viability of using Bitcoin to stabilize national debt, proposing alternatives such as developing a new digital currency. Nonetheless, the concept highlights the growing interest in using cryptocurrencies to gain macroeconomic benefits.
By establishing a strategic Bitcoin reserve, the United States might position itself at the forefront of financial innovation while dealing with its rising debt problems. While it’s unclear if this plan will gain legislative traction, it does open the door to exploring new approaches to economic stability.
