As reported by Cointelegraph, the United States has the potential to diminish its national debt by an impressive 35% over the course of the next 24 years, contingent upon the establishment of a reserve comprised of 1 million Bitcoin, as articulated in a recent report by asset management firm VanEck. This projection dovetails with a legislative proposal put forth by Senator Cynthia Lummis.
According to VanEck’s projections, the cryptocurrency is expected to appreciate at a compounded annual growth rate (CAGR) of 25%, reaching approximately $42.3 million by the year 2049.
Simultaneously, the U.S. national debt is forecasted to swell at a 5% CAGR, escalating from $37 trillion at the commencement of 2025 to a staggering $119.3 trillion during the same timeframe.
“The reserve could represent an estimated 35% of the national debt by 2049, offsetting ~$42 trillion of liabilities,” asserted Matthew Sigel, head of digital asset research at VanEck, alongside investment analyst Nathan Frankovitz in a report released on December 20th.
Their so-called “optimistic” scenario hinges on Bitcoin achieving a starting price of $200,000 in 2025—an ambitious target, considering Bitcoin is valued at $95,360 at the time of writing, thus requiring it to more than double in order to attain this threshold.
Should Bitcoin's value indeed soar to $42.3 million, it would signify that the cryptocurrency constitutes approximately 18% of the global financial assets market, a remarkable increase from the meager 0.22% it currently occupies within today's $900 trillion market.
The notion of establishing a Bitcoin reserve has gained traction amidst the incoming administration of President-elect Donald Trump, propelling Bitcoin prices beyond the six-figure mark. However, it is noteworthy that the Lummis bill is yet to receive consideration from either the Senate or House.
Jack Mallers, founder and CEO of Strike, suggested earlier this month that Trump might issue an executive order on his first day in office to officially designate Bitcoin as a reserve asset.
Under the provisions of the Lummis bill, the U.S. could potentially leverage the 198,100 Bitcoin currently held from asset seizures. Furthermore, financing for the remaining 801,900 Bitcoin could be sourced through Emergency Support Functions, which may include liquidating a fraction of its $455 billion gold reserves in exchange for Bitcoin, or a combination of these strategies—achieved without resorting to money printing or utilizing taxpayer funds, according to VanEck.
The anticipated expansion of Bitcoin's adoption across various levels—state, institutional, and corporate—would further enhance the CAGR estimates proposed by Sigel and Frankovitz.
Additionally, Sigel highlighted the potential influence of BRICS nation-state members—Brazil, Russia, India, China, and South Africa—on Bitcoin’s market value, suggesting an increased utilization of the cryptocurrency as a medium of exchange. “It’s very possible Bitcoin will be widely used as a settlement currency for global trade by countries who wanted to avoid the parabolic increase in USD sanctions that have been imposed,” he noted in a post on X on December 21st.
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