The idea of using Bitcoin to reduce the U.S. national debt has been making headlines, especially in President Donald Trump’s speech at the Nashville Bitcoin Conference in July 2024. Following his remarks, the US. Senator Cynthia Lummis introduced a bill proposing a Strategic Bitcoin Reserve. She said the bill was proposed to help cut down the country’s massive debt. As reported by Crypto.News, a new report from VanEck, an investment management firm, sheds light on whether this plan is feasible. What VanEck’s Research Says According to VanEck’s latest findings, the U.S. government would need to buy one million bitcoins over the next five years and hold them for 20 years. If this plan goes ahead, by 2049, the total value of these bitcoins could reach around $21 trillion. However, this would only cover approximately 18% of the national debt, which is expected to hit $116 trillion by then. It was stated in the report that to achieve these figures, Bitcoin’s price would need to grow at an average rate of 25% per year, eventually reaching $21 billion per coin. Meanwhile, the national debt is projected to rise by 5% annually. While Bitcoin has seen much growth in the past, there is no guarantee it will maintain this pace for the next two decades. In addition, the report mentioned that the acquisition of one million bitcoins would bring about many challenges. This is because the total supply of Bitcoin is currently capped at 21 million. So, any attempts at large government purchases could drive up prices. This will make acquisitions more expensive. Could Bitcoin Ever Erase U.S. Debt? Despite rumors that Bitcoin could wipe out U.S. debt, VanEck’s research suggests otherwise. Paying off the entire debt would require over five million bitcoins at today’s projected growth rates. However, since only 21 million bitcoins exist, this is simply impossible. Furthermore, even if Bitcoin reached $1 million per coin, the U.S. government would still need 36 million bitcoins to clear its debt. On top of that, selling such a massive amount would likely crash the market, further diminishing the value of the reserves. Bitcoin as a Partial Solution While Bitcoin could contribute to debt reduction, it is far from a complete solution. As Senator Lummis initially stated, the aim is to reduce debt, not eliminate it. VanEck’s research supports this perspective, showing that while a Strategic Bitcoin Reserve might help, it is not a magic fix. Since Senator Lummis introduced the bill, several state lawmakers across the U.S. have been considering similar proposals for Bitcoin reserves. For instance, Utah’s Bitcoin Strategic Reserve Bill recently passed the House with an 8-1 vote and is now under review by the Senate Revenue and Taxation Committee. Also, other states, including Florida, Maryland, Pennsylvania, Ohio, and Oklahoma, have also moved to establish Bitcoin reserves. The post Can Bitcoin Pay Off U.S. Debt? VanEck Research Weighs In appeared first on TheCoinrise.com .