Bitcoin reserves might reduce US debt by 36% by 2050

In line with Senator Cynthia Lummis' Bitcoin support, VanEck says a Strategic Bitcoin Reserve could cut U.S. debt by 36% by 2050.

VanEck's Strategic Bitcoin Reserve may lower the U.S. national debt by 36% by 2050, supporting Senator Cynthia Lummis's five-year plan to acquire one million Bitcoins. Lummis thinks this fund might stabilize finances and shield future generations from debt.

Given a 5% annual debt growth rate and a 25% annual Bitcoin value gain, VanEck believes that such a reserve could reduce U.S. debt by $42 trillion by 2049. Under this scenario, Bitcoin will reach $42 million and dominate the global financial market by mid-century. Bitcoin may make up 18% of the world's financial assets, which are predicted to expand 7% yearly, according to VanEck.

Mathew Sigel, VanEck's research chief, said Bitcoin may become a worldwide settlement currency. Bitcoin might replace the U.S. dollar, particularly for governments trying to avoid financial penalties, he said. Sigel underlined the growing use of Bitcoin as a neutral asset for global trade agreements.

VanEck advocated several steps to start this reserve, including stopping Bitcoin sales from U.S. asset forfeiture reserves. They also advised revaluing gold reserves to market prices and using the Exchange Stabilization Fund to buy Bitcoin under a Trump government to advance this process.

VanEck believes these techniques might speed up adoption by circumventing long legislative procedures. But not everyone believes. Nic Carter, a venture entrepreneur, doubted a Bitcoin reserve would strengthen the currency or control national debt.

Investor Peter Schiff suggested creating "USAcoin," a Bitcoin-like digital currency with advantages for ordinary transactions. Schiff believed a digital currency limited at 21 million units like Bitcoin might give financial stability without Bitcoin pricing.

Despite the pessimism, VanEck believes Bitcoin might alter U.S. debt management and the global financial system.

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