Thomas Daniels
Former President Donald Trump has proposed an unconventional solution to address the United States’ escalating $35 trillion national debt: using Bitcoin as a form of repayment. Speaking to Fox News’s Maria Bartiromo, Trump suggested that the U.S. could hand over Bitcoin to China to settle the debt. “Crypto is a very interesting thing. It’s very high-level in certain ways, intellectually very high-level. But if we don’t do it, China’s gonna do it… maybe we’ll pay off our $35 trillion debt, hand them a little crypto check, right?” he remarked. “We’ll hand them a little Bitcoin and wipe out our 35 trillion.”
The proposal is expected to ignite substantial debate within the cryptocurrency community, though its feasibility is fraught with challenges. The U.S. government currently holds 210,392 Bitcoin, valued at approximately $13.3 billion, positioning it among the largest holders of the cryptocurrency.
As of now, Bitcoin is trading near $60,000. To understand the magnitude of Trump’s proposition, several major financial institutions have projected varying future price targets for Bitcoin:
- Fundstrat Global Advisors predicts Bitcoin could reach $180,000 by the end of 2024, spurred by the adoption of spot Bitcoin ETFs.
- Standard Chartered recently updated its 2024 year-end target to $120,000, influenced by increased institutional adoption and favorable market conditions.
- Bernstein has increased its 2025 price target from $150,000 to $200,000, based on Bitcoin’s potential as a hedge against inflation and a store of value.
- ARK Invest envisions a long-term price target of $600,000 by 2030.
- Fidelity has made the boldest prediction, estimating Bitcoin could reach $1 billion by 2038.
Given these projections, the amount of Bitcoin needed to eliminate the national debt varies significantly:
- At the current price of $63,000, the U.S. would need approximately 555,555,600 Bitcoin.
- At $180,000 per Bitcoin, this requirement drops to 194,444,000 Bitcoin.
- At $280,000 per Bitcoin, the figure further reduces to 125,000,000 Bitcoin.
- At $600,000 per Bitcoin, the U.S. would need 58,333,000 Bitcoin.
- At $1,000,000 per Bitcoin, the country would require only 35,000,000 Bitcoin.
- If Fidelity’s projection of $1 billion per Bitcoin by 2038 materializes, only 35,000 Bitcoin would be needed.
However, the practicality of using Bitcoin to offset the national debt is highly questionable. The inherent volatility of Bitcoin, the evolving regulatory landscape, and substantial trading volume pose significant hurdles. For instance, Genesis Trading’s recent sell-off to repay debts has impacted the market.
Furthermore, with Bitcoin’s supply capped at 21 million coins, many of the scenarios proposed are unrealistic. While Trump’s idea of using Bitcoin to eradicate national debt is premature, the continued acquisition and appreciation of Bitcoin could potentially reduce the U.S. debt burden over time.
