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Bitcoin Reserve: A New Tool to Tackle U.S. Debt

Coin WorldFriday, Feb 21, 2025 5:06 am ET
1min read

VanEck, a prominent asset management firm, has introduced an interactive tool to explore the potential role of a Strategic Bitcoin Reserve in managing the U.S. national debt. The tool is inspired by the BITCOIN Act, proposed by Senator Cynthia Lummis, which outlines a plan for the U.S. government to acquire up to 1 million Bitcoins (BTC) over five years, purchasing no more than 200,000 BTC per year. These assets would be held in a dedicated reserve for at least 20 years, with the aim of substantially reducing the nation’s debt.

VanEck’s new calculator allows users to simulate various hypothetical scenarios by adjusting different variables, including the debt and BTC’s growth rates, the average purchase price of Bitcoin, and the total quantity of Bitcoin held in reserve. The firm has also included an “optimistic projection” in their analysis. If the U.S. government follows the BITCOIN Act’s proposed path, accumulating 1 million BTC by 2029, VanEck suggests that this reserve could offset around $21 trillion of national debt by 2049. This would amount to 18% of total U.S. debt at that time.

The analysis is based on assumptions regarding the future growth rates of both U.S. debt and Bitcoin. VanEck has supposed a 5% annual growth rate for the national debt, which would see it rise from $36 trillion in 2025 to around $116 trillion by 2049. Similarly, Bitcoin is presumed to appreciate at a compounded rate of 25% per year. Its acquisition price is predicted to start at $100,000 per Bitcoin in 2025, potentially reaching $21 million per Bitcoin by 2049.

While the federal government considers the potential of a Strategic Bitcoin Reserve, interest is also rising at the state level. At least 20 U.S. states have introduced bills to create digital asset reserves. According to Matthew Sigel, Head of Digital Assets Research at VanEck, state-level bills could collectively drive as much as $23 billion in Bitcoin purchases.

VanEck’s move comes as Bitcoin is receiving increasing political support. U.S. President Donald Trump has reiterated his commitment to positioning the U.S. as a global leader in cryptocurrency

Comments

Post
RamBamBooey
02/21
If states buy $23B in BTC, could be a game-changer for market demand and price.
0
Revolutionary-Slip48
02/21
@RamBamBooey Could $23B boost BTC price fast?
0
notbutterface
02/21
VanEck's tool is lit for Bitcoin strategy 🤔
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pimppapy
02/21
@notbutterface alright
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moneymonster420
02/21
A Strategic Bitcoin Reserve might offset debt, but what about the volatility? Are we ready for that ride?
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Serious_Procedure_19
02/21
@moneymonster420 True, BTC's volatility is wild.
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urfaselol
02/21
Holding some BTC for the long haul makes sense; diversification never goes out of style. 🤑
0
aj_cohen
02/21
I'm holding a bit of BTC and $ETH, diversifying with $AAPL. Gotta hedge against that debt explosion.
0
pregizex
02/21
@aj_cohen I'm all in on BTC, ETH too. Diversifying with gold and some bonds. Debt's a worry, but crypto's my main hustle.
0
zack1567
02/21
@aj_cohen How long you been holding BTC and ETH? You think AAPL's a solid play long-term?
0
discobr0
02/21
Could this reserve really be a game-changer? Or is it just a band-aid on a sinking ship? 🤔
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BeefMasters1
02/21
@discobr0 Just a band-aid, IMO.
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alecjperkins213
02/21
1M BTC reserve sounds ambitious, but VanEck's tool could spark interesting discussions. 📊🚀
0
vanilica00
02/21
@alecjperkins213 Yessir
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DoU92
02/21
Optimistic projection looks juicy, but what's the real risk here? Just another speculative play or a smart move?
0
JRshoe1997
02/21
Bitcoin could be the game-changer for US debt.
0
JRshoe1997
02/21
VanEck's tool is like a BTC debt rollercoaster. 🚀🤔 Ride it right, and we're golden. Screw it up, and we're in trouble.
0
NoBicDeal
02/21
State-level reserves might pump Bitcoin demand 📈
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LarryFromNYC
02/21
1 million BTC sounds like a solid start, but can we trust the growth rates? Debt and Bitcoin both need to be tamed.
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NoBicDeal
02/21
18% debt reduction by 2049? Not bad.
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Sjgreen
02/21
Trump backing crypto again? Seems like the political tide is turning. Could we see $BTC moon soon?
0
VegetaIsSuperior
02/21
VanEck's calculator is like a debt-BTC simulator. Fun to play, but the real game is in the political arena.
0
Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.
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