US Bitcoin reserve could slash national debt 35% by 2049: VanEck
2024-12-23
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The United States could reduce its national debt by 35% in the next 24 years if it creates a reserve of 1 million Bitcoin, in line with a bill proposed by Senator Cynthia Lummis, says asset management firm VanEck.
VanEck’s estimate assumed Bitcoin BTCUSD will increase at a compounded annual growth rate (CAGR) of 25% to $42.3 million by 2049, while US national debt climbs at a 5% CAGR from $37 trillion at the start of 2025 to $119.3 trillion over the same time.
“The reserve could represent an estimated 35% of the national debt by 2049, offsetting ~$42 trillion of liabilities,” VanEck’s head of digital asset research, Matthew Sigel and investment analyst Nathan Frankovitz said in a Dec. 20 report.
The duo’s “optimistic” scenario assumed Bitcoin’s 25% CAGR would start from a $200,000 price point in 2025. Bitcoin is currently trading at $95,360 and would need to more than double to reach VanEck’s noted starting point.
Bitcoin’s price rising to $42.3 million would mean it represents around 18% of the world’s financial assets — up massively from around the 0.22% it represents in today’s $900 trillion market.
Donald Trump’s incoming administration has floated the idea of a Bitcoin reserve, which has fueled a Bitcoin price rally to over six figures, but Senator Lummis’ bill still hasn’t been reviewed by the Senate or House.
Strike founder and CEO Jack Mallers claimed earlier this month that Trump may issue an executive order on his first day in office to designate Bitcoin as a reserve asset.
Under the Lummis bill, the US could repurpose the 198,100 Bitcoin it holds from asset seizures while the remaining 801,900 Bitcoin can be financed through Emergency Support Functions, selling a portion of its $455 billion gold reserves for Bitcoin, or a combination of both — all without money printing and taxpayer funds, VanEck noted.
Bitcoin’s adoption at the US state, institutional and corporate level would also bolster the Bitcoin and Ether (ETH) exchange-traded fund issuer’s CAGR estimates, Sigel and Frankovitz said.
Nation-state members of the BRICS (Brazil, Russia, India, China, and South Africa) alliance could also impact Bitcoin’s price and make it increasingly used as a currency, Sigel explained in a Dec. 21 X post.
“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,” they noted.