Former President Donald Trump suggested using Bitcoin to eliminate the United States’ $35 trillion national debt.
The U.S. national debt continues to rise, and the Republican presidential nominee has a bold idea to address the issue: Giving Bitcoin (BTC) to China to pay off U.S. 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?” Trump said to Fox News’s Maria Bartiromo. “We’ll hand them a little Bitcoin and wipe out our 35 trillion.”
This bold proposal will spark widespread discussion in the crypto space, but the feasibility of using crypto to mitigate the country’s financial debt does not come without its 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 coin.
At the time of writing, Bitcoin is trading near $63,000.
Trump math: How the United States can pay off its debt with Bitcoin
Believe it or not, in a perfect world where price predictions are met, Trump may be onto something. Here are some recent Bitcoin price targets by major financial institutions:
Fundstrat Global Advisors estimates Bitcoin could reach $180,000 by the end of 2024, driven by spot Bitcoin ETF adoption. Standard Chartered has recently revised its 2024 year-end target from $100,000 to $120,000, citing increased institutional adoption and favorable market conditions.
Bernstein, an asset management firm with over $750 billion in assets, doubled down on its bold Bitcoin price prediction and raised its target for 2025 from $150,000 to $200,000. ARK Invest projects a long-term price target of $600,000 by 2030, emphasizing Bitcoin as a hedge against inflation and a store of value. Fidelity has famously predicted that Bitcoin could hit $1 billion by 2038.
At the current price of Bitcoin, the United States would need roughly 555,555,600 Bitcoin to pay off its debt.
At $180,000 per Bitcoin, the United States would need 194,444,000 Bitcoin.
At $280,000 per Bitcoin, the United States would need 125,000,000 Bitcoin.
At $600,000 per Bitcoin, the United States would need 58,333,000 Bitcoin.
At $1,000,000 per Bitcoin, the United States would need only 35,000,000 Bitcoin.
And if Fidelity’s price prediction is correct, and Bitcoin reaches $1 billion by 2038, the United States would only need only 35,000 Bitcoin.
While using Bitcoin to erase national debt is intriguing, the practicality of such an approach is dubious — and it relies on several economic and logistical challenges.
Bitcoin’s volatility, evolving regulatory environment, and significant trading volume must be considered. At the time of writing, Genesis Trading is beginning to sell its Bitcoin to repay debts, causing a large sell-off. Of coarse, Bitcion’s supply is limited to 21 million coins so many of the scenarios above represent unrealistic scenarios.
Currently, Trump’s assertion that a ‘small’ amount of Bitcoin could wipe out all of the US debt is premature, but if the U.S. continues to purchase and amass Bitcoin while its value keeps rising, maybe the country could be debt-free, or at the very least chip away at the massive multi-trillion dollar obligation.