Author: Brayden Lindrea, CoinTelegraph
Compiled by: Deng Tong, Golden Finance
Asset management firm VanEck stated that if the U.S. establishes a reserve of 1 million Bitcoins as proposed in Senator Cynthia Lummis's bill, the country could reduce its national debt by 35% over the next 24 years.
VanEck estimates that by 2049, Bitcoin's compound annual growth rate (CAGR) will reach 25%, hitting $42.3 million, while the CAGR for U.S. treasury bonds will reach 5%, increasing from $37 trillion at the beginning of 2025 to $119.3 trillion.
Matthew Sigel, head of digital asset research at VanEck, and investment analyst Nathan Frankovitz stated in a report on December 20: 'By 2049, this reserve could account for 35% of the national debt, offsetting about $42 trillion in debt.'
It is expected that from 2025 to 2049, U.S. treasury bonds will increase alongside the growth of Bitcoin reserves. Source: VanEck
'Optimistic' predictions suggest that Bitcoin's compound annual growth rate of 25% will start from a price point of $200,000 in 2025. Bitcoin's current trading price is $95,360, which needs to more than double to reach the starting point indicated by VanEck.
The rise of Bitcoin's price to $42.3 million means it accounts for about 18% of global financial assets—far higher than its current 0.22% share in the $90 trillion market.
The estimated compound annual growth rate for U.S. treasury bonds and Bitcoin reserves along with the value of Bitcoin is 25%. Source: VanEck
The new government of Donald Trump proposed the idea of a Bitcoin reserve, driving the price of Bitcoin above six figures, but Senator Lummis's bill has yet to be reviewed by the Senate or the House.
Strike founder and CEO Jack Mallers claimed earlier this month that Trump might issue an executive order on his first day in office designating Bitcoin as a reserve asset.
According to the Lummis bill, the U.S. could reallocate its 198,100 Bitcoins held due to asset seizures, while the remaining 801,900 Bitcoins could be financed through emergency support functions, selling a portion of its $455 billion gold reserves in exchange for Bitcoin, or both—none of which would require money printing or taxpayer funds, VanEck noted.
Sigel and Frankovitz stated that the adoption of Bitcoin at the state, institutional, and corporate levels in the U.S. will also boost the estimated compound annual growth rate for Bitcoin and Ethereum exchange-traded fund issuers.
Sigel explained in a December 21 post that the nation-state members of the BRICS alliance (Brazil, Russia, India, China, and South Africa) could also influence the price of Bitcoin and lead to its increasing use as a currency.
They noted: 'For countries that wish to avoid a parabolic growth of dollar sanctions, Bitcoin is likely to be widely used as a settlement currency for global trade.'
