The idea of the United States holding a Bitcoin reserve is making waves, with projections from VanEck suggesting it could slash national debt by 35% over the next 24 years. Senator Cynthia Lummis has proposed a bill to create a million Bitcoin reserve, and while the concept has fuelled debate, its implementation remains uncertain.
VanEck’s analysis hinges on a bold assumption: Bitcoin’s price will grow at a compounded annual rate of 25%, hitting $42.3 million by 2049. Starting from a hypothetical $200,000 in 2025, the projection more than doubles Bitcoin’s current trading value of around $95,000. If the growth holds, Bitcoin could make up 18% of global financial assets, an enormous leap from today’s 0.22% in a $900 trillion market.
This optimistic scenario envisions Bitcoin reserves offsetting $42 trillion in US liabilities by 2049. It assumes the US national debt grows at a steady 5% per year, ballooning from $37 trillion in 2025 to a staggering $119.3 trillion. Such a reserve would shift Bitcoin from a speculative asset to a linchpin of fiscal policy.
The theory has caught fire among Bitcoin enthusiasts, buoyed by hints from Donald Trump’s incoming administration about exploring the concept. This speculation has contributed to Bitcoin’s current rally beyond six figures. However, Senator Lummis’ bill has yet to clear legislative hurdles, leaving its fate in limbo.
Sceptics point out that while the idea is intriguing, the financial risks of banking on Bitcoin are considerable. Its volatile price history, regulatory uncertainties, and broader market acceptance pose challenges to its adoption as a sovereign reserve asset. Still, the potential rewards are difficult to ignore for a nation grappling with mounting debt.
Whether America will embrace Bitcoin as a long-term solution to its fiscal challenges or simply flirt with the idea, the debate signals a growing recognition of digital assets’ role in the future of global finance. For now, the US Bitcoin reserve remains a tantalising possibility, with the world watching to see if it becomes reality or fades into speculative history.
