Asset management firm VanEck has proposed that the United States could significantly reduce its national debt by creating a Bitcoin reserve. The analysis estimates that if Bitcoin grows at a 25% compounded annual growth rate (CAGR) to reach $42.3 million per coin by 2049, the reserve could offset 35% of the national debt, approximately $42 trillion.

Key Details of the Proposal:

Bitcoin Reserve Projection:

  • The U.S. would need to accumulate 1 million BTC as part of a national Bitcoin reserve.

  • Bitcoin, currently trading at $95,928, would need to more than double to $200,000 by 2025 for VanEck’s optimistic scenario to take effect.

Debt Reduction Impact:

  • U.S. national debt is projected to grow at a 5% CAGR, rising from $37 trillion in 2025 to $119.3 trillion by 2049.

  • A Bitcoin reserve could offset approximately 35% of this debt.

Bitcoin’s Market Role:

  • By 2049, Bitcoin at $42.3 million would represent 18% of the world’s financial assets, up from its current 0.22% share of the $900 trillion global market.

Funding the Bitcoin Reserve:

  • Under Senator Cynthia Lummis' proposed bill, the U.S. could repurpose the 198,100 BTC already held from asset seizures.

  • Additional BTC could be acquired through:

    • Selling a portion of the U.S.’s $455 billion gold reserves.

    • Emergency Support Functions without money printing or taxpayer funding.

Supporting Factors:

  • State and Institutional Adoption:

    • Growing Bitcoin adoption at U.S. state, institutional, and corporate levels would strengthen VanEck’s CAGR estimates.

  • Global Trade and BRICS Influence:

    • VanEck predicts Bitcoin could become widely used as a settlement currency for global trade, especially among nations aiming to bypass increasing USD sanctions.

Political Developments:

  • President-elect Donald Trump’s administration has floated the idea of a Bitcoin reserve, fueling a rally that pushed Bitcoin prices into six figures.

  • Strike CEO Jack Mallers speculated that Trump might issue an executive order on his first day in office to designate Bitcoin as a reserve asset.

VanEck’s proposal underscores Bitcoin's potential as a transformative asset for national debt management and global financial markets. However, its success hinges on significant price appreciation and widespread adoption at state and international levels. As the Lummis bill awaits review, Bitcoin’s role in reshaping U.S. fiscal policy remains speculative but increasingly discussed, according to Cointelegraph.

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