The proposal is in line with Senator Cynthia Lummis’s argument that the US should accumulate 1 million Bitcoins for long-term financial stability. However, despite the optimistic predictions, the initiative has been met with skepticism by some.
VanEck, one of the leading asset management firms, predicts that the United States could reduce its national debt by 36% if it created a Strategic Bitcoin Reserve by 2050.
The plan is in line with Senator Cynthia Lummis’ Bitcoin Act, which proposes that the United States accumulate 1 million Bitcoins over the next five years. Lummis argues that such a strategy could put future generations on a more solid financial footing by freeing them from current debt.
According to VanEck’s analysis, a large investment in Bitcoin could reduce the US national debt by an estimated $42 trillion by 2049. This calculation is based on an annual debt growth rate of 5% and assumptions that Bitcoin will gain 25% in value each year.
According to this scenario, the value of Bitcoin will exceed $42 million by 2049, making Bitcoin a major player in the global financial arena.
“If we assume that global financial assets will grow by 7% between 2025 and 2049, Bitcoin could account for 18% of these assets,” VanEck said.
VanEck’s head of research, Mathew Sigel, noted that Bitcoin has the potential to reshape the global financial landscape, noting that Bitcoin could become the leading means of payment in global trade, especially for countries trying to evade US sanctions.
To implement this plan, VanEck suggests several measures, such as halting Bitcoin sales from U.S. asset forfeiture reserves. They also suggest that, under a future administration under former President Donald Trump, gold certificates be revalued at market prices and the Exchange Stabilization Fund be used for initial Bitcoin purchases. Such arrangements could help quickly establish the reserve without waiting for regulatory approvals.
However, this proposal also raises some doubts. Venture capitalist Nic Carter has expressed doubts about whether Bitcoin reserves will strengthen the US dollar. On the other hand, economist Peter Schiff has suggested that the US should create a new digital currency, USAcoin. Schiff argued that USAcoin could have a limited supply of 21 million like Bitcoin, but would need to have an advanced blockchain infrastructure to be usable in payment systems.