💰Bitcoin Strategic Reserves, a New Antidote to U.S. Government Debt?

Recently, a widely discussed viewpoint on social media platform X has sparked heated debate. The core argument of this viewpoint is whether establishing a strategic Bitcoin reserve (SBR) can enable the U.S. to clearly and strategically repay its government debt.

Senator Cynthia Lummis clearly stated on X that the purpose of the strategic Bitcoin reserve is to repay the government debt hanging over every American, freeing future Americans from the burden of debt they never supported or benefited from. She suggested that by holding Bitcoin for at least 20 years and establishing proof of reserves, it will then be clear that using Bitcoin to offset the debt will be the next logical step.

However, this viewpoint has also faced skepticism. Mago PhD questioned whether debt needs to be repaid if there are offsetting assets. Cynthia Lummis responded by stating that the language of the bill requires holding for at least twenty years and establishing proof of reserves. Han Solo argued that the reserves themselves are not inherently strategic; they are simply savings.

In terms of supporting data, there are charts comparing the value of Bitcoin reserves with the value of U.S. Treasury bonds, as well as projections of Bitcoin's compound annual growth rate (CAGR). Analysts believe that if the U.S. Treasury were to purchase 1 million Bitcoins at a starting price of $200,000 over a period of 3 years, it could potentially offset a portion of the U.S. government debt.

Another tweet analyzed that over the past 15 years, Bitcoin has attracted $790 billion in investment, driving its market capitalization to soar to $2 trillion. This year, it has seen an inflow of $352 billion, resulting in a market cap surge of $1 trillion.

Considering that 70% of U.S. debt is domestic, if the government views Bitcoin as a strategic asset, it is entirely possible to offset 36% of the debt by purchasing 1 million Bitcoins by 2050. Although the remaining 30% of foreign-held debt may not accept this approach, this plan does not require Bitcoin to repay all debts, so it remains feasible.

However, the concept of using Bitcoin as a strategic reserve to offset U.S. debt, while innovative, still raises questions about its feasibility and long-term impact on the economy, warranting in-depth discussion and attention.