Trump has proposed using Bitcoin to tackle the US’s $35 trillion national debt. However, critics question the feasibility of this approach, arguing that it could destabilize the market. Additionally, Trump’s electoral chances in the November elections have dropped to 54% from a 72% peak on Polymarket.
Former US President and Republican candidate Donald Trump continues to champion Bitcoin as he campaigns for re-election this November. In a recent statement, Trump suggested that Bitcoin could be instrumental in addressing the United States’ substantial national debt.
Trump Suggests Bitcoin Could Eliminate US Debt
In an interview with Fox News’ Maria Bartiromo, Trump implied that Bitcoin could potentially eliminate the US’s $35 trillion foreign debt. He argued that this digital asset, if adopted and supported effectively, could benefit the nation. “Who knows? Maybe we’ll pay off our $35 trillion dollars, hand them a little crypto check, right? We’ll hand them a little bitcoin and wipe out our $35 trillion,” Trump stated.
The US national debt has been a major topic of discussion, especially since surpassing $35 trillion. According to market analysis platform Kobeissi Letter, the US has accumulated approximately $12 trillion in federal debt since 2020. The current deficit spending as a percentage of GDP is now at levels seen during World War II.
“In other words, the US has added around $280 billion in federal debt each month since January 2020. This equates to about $105,000 in federal debt per person in the country,” the firm noted.
US National Debt. Source: Kobeissi Letter
Trump’s Bitcoin Debt Solution Faces Skepticism
The idea of using Bitcoin to reduce national debt is not entirely new. It aligns with the Bitcoin Act bill introduced by Senator Cynthia Lummis, which proposes creating a strategic Bitcoin reserve and authorizing the US Treasury to acquire 1 million BTC over five years.
Crypto enthusiasts like David Bailey, CEO of Bitcoin Magazine, support this concept. Bailey believes Bitcoin could address the US national debt within a few epochs. However, financial experts remain doubtful. They argue that Bitcoin’s market capitalization would need to surpass $35 trillion to make this feasible. One investor noted, “Selling off 35 TRILLION dollars worth of Bitcoin would collapse the market and cause BTC to drop to $0. And… this would require China and other countries to even WANT Bitcoin as a debt repayment… do people not know how the world works?”
Trump’s comments follow his keynote speech at the Bitcoin 2024 conference in Nashville, where he advocated for a more significant role for digital assets in the US economy. His speech underscored his growing interest in the crypto sector and its potential benefits.
Donald Trump’s Election Odds. Source: Polymarket
This debate comes amid a decline in Trump’s chances of winning the presidential election, which have dropped to 54% from a peak of 72% in July. His main rival, Vice President Kamala Harris, has gained traction and recently secured her first major crypto executive endorsement from Uphold’s co-founder, J.P. Theriot.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
