US President Donald Trump has stirred the pot once again, suggesting that cryptocurrencies could serve as a lifeline for the staggering $38 trillion national debt. His recent remarks have ignited a worldwide dialogue regarding the utility of digital assets, particularly Bitcoin (BTC), in addressing the country’s financial conundrum.
Can Bitcoin Bridge the Gap on US National Debt?
During a private conference, Trump expressed a visionary stance on digital currencies, indicating that crypto “has got a great future.” The implications of his comments were clear: he envisioned a scenario where the country could potentially pay off its $35 trillion debt using cryptocurrency. “I’ll write on a little piece of paper, $35 trillion in crypto – we have no debt. That’s what I like.“
While this isn’t the first time Trump has hinted at using cryptocurrencies to alleviate American debt, his repeated suggestions underscore a growing interest in the potential of Bitcoin as a financial tool. The boldness of his claim raises an obvious question: just how high would Bitcoin need to rise in price to completely obliterate the national debt?
Investment giant Fidelity has attempted to tackle this question, performing analyses based on current Treasury data and Bitcoin’s supply metrics. Their calculations indicate that with BTC’s circulating supply of approximately 19.93 million, each Bitcoin would need a valuation exceeding $1.9 million to cover the entire $38 trillion debt. Such a scenario would position Bitcoin’s market cap at par with the national debt.
The stark reality is that the US government doesn’t hold the entire supply of Bitcoin. Currently, it has possession of about 326,373 BTC, a little under 1.6% of total circulation, primarily obtained through asset seizures during criminal investigations. If the US attempted to pay off its debt using only its existing Bitcoin holdings, the asset’s price could skyrocket to approximately $116.5 million per coin—about a thousand times its current value.
At this astronomic price point, Bitcoin’s market capitalization would balloon to $230 trillion, eclipsing the entire global GDP. Such a dramatic increase would not only reflect a ludicrous valuation but could also trigger a liquidity crisis with significant repercussions for the cryptocurrency market.
Institutional Confidence in Bitcoin’s Future?
The prospect of Bitcoin reaching a price tag of $116.5 million might sound preposterous now; however, recent trends indicate that institutional investors are bullish on Bitcoin’s growth potential. Reports suggest a considerable uptick in Bitcoin accumulation among major institutions, signaling a strong belief that the digital asset still has substantial room to appreciate.
Furthermore, crypto transactions have notably surged since Trump’s presidency began, highlighting a renewed interest in decentralized currencies. As of the latest data, Bitcoin is trading at around $110,052, reflecting a modest increase of 0.1% in the past 24 hours.
As discussions around the viability of cryptocurrencies continue, one thing is clear: the dialogue initiated by Trump has highlighted the transformative potential of Bitcoin within the financial landscape, driving newfound curiosity and investment into this revolutionary asset class.
