Former President Donald Trump has suggested using Bitcoin to eliminate the $35 trillion US national debt.
The US national debt continues to rise, and the Republican presidential candidate has a bold idea to address the issue: give Bitcoin (BTC) to China to pay off US debt.
“Cryptocurrency is a very interesting thing. It’s very high-level in some ways, very high-level intellectually. But if we don’t do it, China will do it… We might as well pay off our $35 trillion debt and hand them a little check in crypto, right?” Trump He said “We’re going to give them a little bit of bitcoin and wipe out 35 trillion of our currency,” said Maria Bartiromo of Fox News.
This bold proposal is expected to spark widespread debate in the cryptocurrency space, but the feasibility of using cryptocurrencies to alleviate the country’s financial debt does not come without a set of challenges.
The United States government currently holds 210,392 Bitcoin, which is currently worth $13.3 billion, making the country one of the largest holders of the currency.
At the time of writing, Bitcoin is trading at around $63,000.
Trump Math: How the US Could Pay Off Its Debt With Bitcoin
Believe it or not, in a perfect world where price predictions come true, Trump might be right. Here are some recent Bitcoin price targets set by major financial institutions:
Fundstrat Global Advisors estimates that Bitcoin could hit $180,000 by the end of 2024, thanks to the adoption of a spot Bitcoin exchange-traded fund. Standard Chartered recently revised its end-2024 target from $100,000 to $120,000, citing increased institutional adoption and favorable market conditions.
Asset manager Bernstein, which has more than $750 billion in assets under management, has doubled its aggressive Bitcoin price forecast, raising its 2025 target from $150,000 to $200,000. Ark Invest has a long-term price target of $600,000 by 2030, focusing on Bitcoin as a hedge against inflation and a store of value. And expect Bitcoin is expected to reach $1 billion by 2038.
In the Current price of bitcoinThe United States would need approximately 555,555,600 Bitcoins to pay off its debt.
in $180,000 For every Bitcoin, the United States would need 194,444,000 Bitcoin.
in $280,000 For every Bitcoin, the United States would need 125 million Bitcoin.
in $600,000 For every Bitcoin, the United States would need 58,333,000 Bitcoin.
in $1,000,000 For every Bitcoin, the United States would only need 35 million Bitcoin.
If Fidelity’s price prediction is correct, and Bitcoin reaches 1 billion dollars By 2038, the United States will only need 35,000 Bitcoins.
While using Bitcoin to erase the national debt is interesting, the practicality of such an approach is questionable — and depends on a number of economic and logistical challenges.
We must take into account Bitcoin’s volatility, evolving regulatory environment, and high trading volume. At the time of writing, Genesis Trading began selling Bitcoin to pay off debt, causing a massive sell-off. Of course, Bitcoin’s supply is limited to 21 million coins, so many of the scenarios mentioned above are unrealistic.
At the moment, Trump’s assertion that a “small” amount of Bitcoin could wipe out all of America’s debt is premature, but if the United States continues to buy and accumulate Bitcoin while its value continues to rise, the country could become debt-free, or at least get rid of its massive trillion-dollar liabilities.