Introduction
In the current global economic situation, the issue of US national debt has always been a concern. Recently, asset management company VanEck put forward a bold idea: if the United States establishes a national reserve of 1 million bitcoins and assumes that the price of bitcoin can grow at a compounded annual growth rate of 25% per year, the US may be able to reduce its national debt by 35% over the next 24 years through these bitcoin assets. This concept is based on the Bitcoin Strategic Reserve Act proposed by Republican Senator Cynthia Lummis and has sparked widespread discussion.
VanEck’s Bitcoin Reserve Hypothesis
Matthew Sigel, Director of Digital Assets Research at VanEck, and Investment Analyst Nathan Frankovitz stated in their latest report that assuming bitcoin prices grow at a 25% compound annual growth rate (CAGR), by 2049, the price of bitcoin could reach $42.3 million per coin. At that time, the 1 million bitcoins held by the US government would account for 35% of the US national debt, significantly reducing liabilities by about $42 trillion.
Specifically, VanEck predicts that from 2025 onwards, the US national debt will grow at a 5% compound annual growth rate, increasing from $37 trillion in 2025 to $119.3 trillion. In this context, a reserve of 1 million bitcoins would provide significant financial support to the US, helping to alleviate debt pressure. If the price of bitcoin rises to $42.3 million, these bitcoins would account for 18% of the global financial assets market, far higher than the current market share of about 0.22%.
Cynthia Lummis’ Bitcoin Reserve Proposal
Cynthia Lummis is a staunch supporter of bitcoin and has suggested that the US should include bitcoin in its national strategic reserves. She believes that the US federal government should have a strategic reserve of bitcoin to support the US dollar as the world’s reserve currency and help address the increasingly severe national debt issue. Her proposal has sparked widespread discussion, although it has not yet been passed in the US Congress.
In Lummis’ vision, the US could utilize existing gold reserves, seized assets, or other resources to purchase bitcoin. This would not only avoid directly increasing the taxpayer burden but also provide long-term financial support to the US through the appreciation of these bitcoins.
Optimistic Scenario for Bitcoin Price and Future Outlook
According to VanEck’s “optimistic scenario,” starting from a price of $200,000 in 2025, bitcoin is projected to reach $42.3 million per coin by 2049. To achieve this goal, the price of bitcoin would need to at least double from the current level of $95,360.
If this prediction comes true, bitcoin could not only help the US reduce its national debt but also potentially elevate bitcoin’s position in the global financial system. VanEck points out that in this scenario, bitcoin’s market value would account for 18% of the global financial assets market, which could have far-reaching implications for global asset allocation and structural changes in financial markets.
Global Impact and Policy Support for Bitcoin
In addition to domestic support in the US, VanEck also believes that the global influence of bitcoin is expanding. Members of alliances like the BRICS countries (Brazil, Russia, India, China, and South Africa) are increasingly using bitcoin as a settlement currency in global trade to avoid the impact of US dollar sanctions. As a result, the international application of bitcoin is accelerating, which could drive significant price growth.
Furthermore, the adoption of bitcoin at the state government, institutional, and corporate levels in the US is increasing the demand for bitcoin and other digital assets like Ethereum (ETH). This will facilitate the launch of cryptocurrency ETFs (exchange-traded funds) and further promote the circulation of assets like bitcoin in the global financial market.
Bitcoin and Ethereum Latest Price Trends Today
Currency Price 24H Change 24H Volume Market Cap 7-Day Price Trend
BTC Bitcoin $94,186.53 -0.33% $63.9 billion $18.598 trillion
ETH Ethereum $3,387.96 3.73% $33.1 billion $4.070 trillion
Potential Impact of Bitcoin Reserve Plan on US National Debt
VanEck also points out that if the US could establish a reserve of 1 million bitcoins according to Lummis’ bill, and use funds from selling part of its gold reserves or other means to purchase bitcoin, the appreciation of these bitcoin assets could generate significant economic benefits over the next few decades. By 2049, these bitcoin reserves could reduce the US national debt by approximately $42 trillion, equivalent to 35% of the US national debt.
More importantly, VanEck’s report suggests that as bitcoin becomes more widely accepted and adopted, its attractiveness as a reserve asset will further enhance. This could not only provide a stable channel for wealth growth for the US but also potentially drive more countries globally to adopt bitcoin as part of their national strategic reserves.
Conclusion
As a digital asset, bitcoin is gradually gaining recognition from governments and institutions around the world. From VanEck’s assumptions, bitcoin not only has the potential to appreciate significantly over the next few decades but also could become an effective tool for the US to address its massive national debt. Cynthia Lummis’ proposal provides a clear strategic direction for bitcoin in the US financial system. If this plan is implemented, the US debt issue may be effectively alleviated, while also potentially bringing about profound changes in the global financial market.
With the gradual development of bitcoin and other crypto assets, it is foreseeable that digital currencies will play an increasingly important role, especially in the context of global economic uncertainty and challenges to the traditional financial system. The potential of bitcoin as a reserve asset is undoubtedly worth looking forward to.
