Asset management firm VanEck has indicated that a Strategic Bitcoin Reserve could assist in alleviating the escalating debt of the US, which presently totals $36 trillion.
To investigate the possible implications of this concept, the company has created an interactive tool inspired by the BTC Act.
How Will a Strategic Bitcoin Reserve Mitigate US Debt?
The BITCOIN Act, put forth by Senator Cynthia Lummis, details a proposal for the US government to procure up to 1 million BTC within five years, acquiring a maximum of 200,000 BTC annually.
These assets would be retained in a specialized reserve for a minimum of 20 years. Lummis asserts that such a reserve could significantly lessen the nation’s debt.
Importantly, VanEck’s new calculator allows users to understand the repercussions of such a reserve. The tool enables the simulation of various hypothetical situations by modifying different variables.
These variables include the national debt and the rate of BTC growth, the average acquisition price of Bitcoin, and the overall quantity of Bitcoin maintained in the reserve. Additionally, VanEck has incorporated their own “optimistic scenario.”
“If the US government adheres to the BITCOIN Act’s suggested strategy – accumulating 1 million BTC by 2029 – our analysis indicates that this reserve could counterbalance approximately $21 trillion of national debt by 2049. This would represent 18% of the total US debt at that time,” remarked VanEck.
This analysis relies on assumptions regarding future growth rates for both US debt and BTC. VanEck has anticipated a 5% annual growth rate for the national debt, projecting it to escalate from $36 trillion in 2025 to roughly $116 trillion by 2049.
Likewise, Bitcoin is expected to appreciate at an annual compounded rate of 25%. The purchasing price is projected to begin at $100,000 per Bitcoin in 2025, leading to a possible price of $21 million per Bitcoin by 2049.
As the federal government explores the possibilities of a Strategic BTC Reserve, there is also growing interest at the state level. At least 20 US states have put forward legislation to establish digital asset reserves.
Matthew Sigel, Head of Digital Assets Research at VanEck, noted that state-level legislation could cumulatively facilitate as much as $23 billion in Bitcoin acquisitions.
President Trump’s Cryptocurrency Commitment
VanEck’s initiative coincides with increasing political backing for Bitcoin. US President Donald Trump has reaffirmed his dedication to establishing the US as a global leader in cryptocurrency.
At the Future Investment Initiative Institute summit held in Miami, Trump highlighted the economic advancement spurred by crypto-friendly regulations.
“Bitcoin has achieved multiple all-time highs as everyone is aware that I’m committed to making America the hub for cryptocurrency,” Trump pointed out.
Since his return to office, Trump has enacted an executive order to create a national “digital asset reserve.” He has also appointed pro-crypto figures to lead major regulatory agencies. Nevertheless, it remains to be seen if a Bitcoin reserve will come into existence.
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