Asset manager VanEck suggests that the United States will cut its national debt by a staggering 36% if the country adopts Bitcoin as a reserve asset.
The US President-elect, Donald Trump, has described #Bitcoin as the cryptocurrency of the future. Notably, he has often teased using Bitcoin to pay for the growing national debt.
Other Bitcoin advocates in the United States also share a similar sentiment. For context, Senator Cynthia Lummis has argued that the premier crypto asset would facilitate a debt-free America, providing a better economic environment for future generations.
Amid these discussions, multi-billion asset manager VanEck has shared a template showing the impact of Bitcoin adoption on the national debt.
Pros and Cons of Bitcoin Strategic Reserve
VanEck’s analysis hinges on Senator Lummis’s Bitcoin Act bill, which proposes buying 1 million bitcoins over five years. The asset manager noted that the US could finance the purchases through executive action while the legislative deliberation is underway.
The leading asset manager also stressed that the US could hold the first 200,000 tokens through confiscated bitcoins. The purchase of the remaining 800,000 tokens could come from reevaluating the country’s $693 billion gold stash and possibly unlocking capital through its sales. Further, the purchase could also come from the $49.7 billion Exchange Stabilization Fund (ESF) signed off by the Treasury Secretary.
Meanwhile, VanEck noted that if Bitcoin appreciates 25% annually from its $200,000 base price in 2025 and the US acquires 200,000 BTC yearly, its stash would be worth $42.4 trillion by 2049. Also, if the US debt grows by 5% from $37 trillion next year, it will reach $119.3 trillion in the next 26 years.
Hence, accruing 1 million BTC over the next five years would slash the US debt by an impressive 36%. Furthermore, if the world’s wealth appreciated by 7% from its current $900 billion valuation, Bitcoin will capture 18% of the global financial market with a 25% yearly growth rate.
