December 22, 2024
VanEck, a leading asset management firm, recently predicted that the United States could significantly reduce its national debt by up to 36% by 2050 by adopting a strategic reserve of Bitcoin.
The initiative is in line with the Bitcoin Act introduced by Senator Cynthia Lummis, which calls on the United States to collect one million bitcoins over the next five years. The lawmaker argues that such a reserve could put future generations on a more stable financial footing, free of debt they have not incurred or benefited from.
How Bitcoin Reserves Could Change US Debt Management by 2050?
Van Eck’s analysis supports this strategy, predicting that such an investment could reduce national liabilities by $42 trillion by 2049. This forecast assumes a constant debt growth rate of 5% and an annual Bitcoin appreciation rate of 25%.
In this scenario, Bitcoin would be worth more than $42 million, making it a major player in the global financial arena by 2049.
“Assuming that today’s total global financial assets of $900 trillion increase by 7% from 2025 to 2049, Bitcoin would represent 18% of global financial assets in this scenario,” Van Eck added.
Matthew Siegel, head of research at VanEck, has emphasized Bitcoin’s potential role in reshaping the global financial landscape. He suggested that Bitcoin could become the primary settlement currency for global trade — offering an alternative to the US dollar — especially for countries seeking to avoid US sanctions.
“It is entirely possible that Bitcoin will be widely used as a settlement currency for global trade by countries that want to avoid the parabolic increase in US dollar sanctions that have been imposed,” wrote Matthew Siegel.
To get this ambitious project off the ground, Van Eck recommends several initial measures, including halting the sale of Bitcoin from US asset forfeiture reserves.
Furthermore, they suggest that adjustments could be made under the incoming administration of President Donald Trump, such as revaluing gold certificates to their current market prices and using the Exchange Stabilization Fund to make initial Bitcoin purchases.
Indeed, these steps could help create the reserve quickly without waiting for broad legislative approval.
However, the proposal has been met with some skepticism. Venture capitalist Nick Carter has questioned whether a Bitcoin reserve would really support the US dollar. Meanwhile, Peter Schiff has proposed an alternative: the creation of a new digital currency called USA Coin.
Schiff suggested: “The United States could save a lot of money by creating a USA Coin. Like Bitcoin, the supply could be capped at 21 million, but with an upgrade to the blockchain to make USA Coin actually usable for payments.”