In the wake of former President Trump’s watershed speech at the Nashville Bitcoin conference in July 2024, Senator Cynthia Lummis introduced a bold Bitcoin reserve bill aimed at reducing the national debt. Now, new research from investment management firm VanEck sheds light on the potential impact of this Strategic Bitcoin Reserve, suggesting that if adopted, Bitcoin could offset about 18% of the U.S. debt by 2049.
A New Tool for Fiscal Forecasting
On February 21, 2025, VanEck unveiled an innovative calculator tool based on their research. This tool allows policymakers to simulate various scenarios by adjusting key parameters such as the number of bitcoins purchased annually, the average purchase price in 2025, and the average compound growth rates of both Bitcoin’s price and the national debt. The research assumes that the Bitcoin Act proposed by Lummis is enacted without significant modifications.
The Assumptions Behind the Numbers
VanEck’s analysis is built on an ambitious premise: the U.S. Treasury would accumulate one million bitcoins over a span of five years and then hold them for 20 years, exclusively using the reserves to cover national debt. According to the December 2024 research, these accumulated bitcoins could be valued at approximately $21 trillion by 2049, thereby offsetting around 18% of the national debt, which is projected to reach nearly $116 trillion. This scenario is predicated on assumptions that the national debt grows at an average rate of 5% per year—from today’s estimated $36 trillion—and that Bitcoin’s price experiences an average compound growth of 25% per year, rising from roughly $100,000 in 2025 to an astronomical $21 billion per coin in 2049.
A Partial Solution, Not a Cure-All
While the research underscores the potential for Bitcoin to serve as a partial hedge against national debt, it also highlights significant limitations. To completely pay off the U.S. debt under these growth projections, the government would need to acquire over five million bitcoins—a scenario rendered impossible by Bitcoin’s fixed maximum supply of 21 million coins. Even without factoring in further debt growth, the notion of fully offsetting the national debt with Bitcoin remains highly unrealistic.
Former President Trump, during an August 2024 Fox News interview, speculated that Bitcoin could potentially clear trillions in U.S. debt. However, VanEck’s findings suggest that while a Strategic Bitcoin Reserve could mitigate a portion of the debt burden, it is far from a panacea.
Practical Challenges and Industry Realities
Beyond theoretical calculations, the practical aspects of such a strategy present additional hurdles. Accumulating even one million bitcoins poses a formidable challenge. Currently, industry giant BlackRock is reported to hold over half a million bitcoins, and veteran Bitcoin advocate Michael Saylor has remarked that “there’s only room for one nation-state to buy up 20% of the Bitcoin network.” These comments underscore the difficulty of amassing a large enough reserve without distorting market dynamics.
Another significant concern is the liquidity challenge. Converting a reserve of such magnitude into cash without triggering a sharp decline in Bitcoin’s market value is an equally daunting task. The potential market impact of selling a vast number of bitcoins could negate much of the intended fiscal benefit.
Looking Ahead
VanEck’s research paints a nuanced picture: a Strategic Bitcoin Reserve, while capable of partially reducing the U.S. debt, would hardly serve as a complete solution. As policymakers and industry leaders deliberate on integrating Bitcoin into national fiscal strategy, the study serves as a sober reminder of both the potential benefits and the inherent limitations of leveraging digital assets in public finance. Ultimately, Bitcoin’s role in addressing the U.S. debt will remain a complex and contentious issue for the foreseeable future.
