THE The United States could potentially reduce its national debt by 35% within 24 years by establishing a reserve of one million Bitcoins.according to a report from asset management company VanEck. The projection aligns with a proposal put forward by Sen. Cynthia Lummis.
VanEck’s analysis assumes that Bitcoin will grow at a compound annual growth rate (CAGR) of 25%, reaching $42.3 million per BTC by 2049. During the same period, THE WE national debt is expected is expected to grow at a CAGR of 5%, from $37 trillion in 2025 to $119.3 trillion.
By 2049, a Bitcoin reserve could offset approximately $42 trillion in national liabilities, according to to the report authored by Matthew Sigel, VanEck’s Head of Digital Asset Research, and investment analyst Nathan Frankovitz.
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VanEck Project Assumes Bitcoin Price Will Reach $200,000 in 2025
The projection assumes that the price of Bitcoin will increase Since $200,000 in 2025—one sharp increase from its current price of $95,360.
If Bitcoin reached the predicted valuation of $42.3 million, it would account for approximately 18% of global financial assets, a significant increase from its current 0.22% share of a $900 trillion market.
The idea of a WE The Bitcoin reserve has gained momentum following discussions within the new Donald Trump administration, fueling a rise in the price of Bitcoin beyond $100,000.
Additionally, Strike CEO Jack Mallers speculated that Trump could issue an executive order designating Bitcoin as a reserve asset on his first day in office. However, Senator Lummis’ bill proposing such a reservation has not yet been considered by Congress.
The Lummis bill suggests repurposing the 198,100 Bitcoins seized during criminal activity and funding the remaining 801,900 BTC through measures such as selling a portion of the government’s $455 billion gold reserves. country or the use of emergency support functions.
VanEck emphasized that this strategy could avoid money printing or taxpayer funding.
“We have a model that assumes that by 2050 #Bitcoin becomes a reserve asset held by central banks with a weighting of 2%. In this model, we arrive at a $3 million price target for Bitcoin.
–VanEckpic.twitter.com/rrHa2wnrDa
– Bold Bitcoin (@BoldBitcoin) November 19, 2024
Bitcoin adoption at the federal, institutional, and corporate levels could further support its growth. VanEck noted that the adoption of Bitcoin by BRICS countries (Brazil, Russia, India, China and South Africa) could also have a significant impact on its use as a currency of settlement of world trade.
According to Sigel, countries seeking to circumvent the growing use of WE dollar sanctions could lead to wider acceptance of Bitcoin in international trade.
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WE States consider adding Bitcoin to reserves
Ohio became the last WE state to consider adding Bitcoin to its cash reserves, following the introduction of a new bill by House Republican Leader Derek Merrin.
The initiative mirrors recent moves by Texas and Pennsylvania to establish Bitcoin reserves.
On December 12, 2024, Texas Representative Giovanni Capriglione introduced the Texas Strategic Bitcoin Reserve Actwhich proposes that the state comptroller hold Bitcoin as a reserve asset for at least five years.
Pennsylvania took a similar step in November, with Rep. Mike Cabell proposing a bill allowing his Treasury to allocate up to 10% of its balance sheet to Bitcoin, citing the asset’s potential to protect against economic uncertainty .
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