VanEck: U.S. Bitcoin Reserve Could Slash National Debt by 35% by 2049

A new report from asset management firm VanEck suggests that the United States could significantly reduce its national debt by establishing a Bitcoin reserve. According to the firm, if the U.S. creates a reserve of 1 million Bitcoin, the national debt could be slashed by 35% by 2049. This bold prediction is based on the assumption that Bitcoin’s price will increase substantially over the next 24 years, potentially reaching $42.3 million per coin by the end of the period.

The VanEck Forecast

VanEck’s analysis hinges on an optimistic scenario in which Bitcoin experiences a compounded annual growth rate (CAGR) of 25%, rising from its current price of around $95,360 to $42.3 million by 2049. If this happens, Bitcoin would represent approximately 18% of the world’s total financial assets, up dramatically from the 0.22% share it holds today in a $900 trillion global market.

In this scenario, the U.S. could offset an estimated $42 trillion in liabilities, significantly reducing the national debt, which is projected to grow from $37 trillion in 2025 to $119.3 trillion by 2049, assuming a 5% CAGR. VanEck’s head of digital asset research, Matthew Sigel, and investment analyst Nathan Frankovitz, who authored the Dec. 20 report, argue that such a reserve could act as a powerful tool to combat the ballooning national debt.

The Lummis Bill and Potential Bitcoin Reserves

The idea of a U.S. Bitcoin reserve has gained traction following the introduction of a bill proposed by Senator Cynthia Lummis. Although the bill has yet to be reviewed by Congress, it has sparked interest in the potential of Bitcoin as a national reserve asset. Under the bill’s framework, the U.S. could use its existing 198,100 Bitcoin holdings, derived from asset seizures, and acquire the remaining 801,900 Bitcoin through various means, including selling a portion of the country’s $455 billion gold reserves, all without resorting to money printing or taxpayer funds.

This vision of a Bitcoin-backed reserve has already garnered attention from some political figures. For instance, there are reports that the incoming administration of former President Donald Trump may issue an executive order on its first day in office to designate Bitcoin as a reserve asset. Such developments have already contributed to Bitcoin’s recent price rally, which has seen the cryptocurrency surpass six figures.

Bitcoin’s Growing Role in the Global Economy

VanEck’s analysts also note the broader macroeconomic context that could fuel Bitcoin’s growth. Bitcoin’s increasing adoption by U.S. states, institutions, and corporations could support the firm’s bullish price forecasts. Additionally, the role of Bitcoin in the global financial system may be enhanced by nation-state members of the BRICS alliance—Brazil, Russia, India, China, and South Africa—which could adopt Bitcoin for international trade to bypass the growing use of U.S. dollar sanctions.

Sigel and Frankovitz suggest that Bitcoin could eventually become a widely used settlement currency for global trade, particularly among countries seeking to avoid the financial leverage exerted by U.S. sanctions. As this trend unfolds, the demand for Bitcoin could rise, further driving its price upwards and reinforcing its value as a reserve asset.

Conclusion

VanEck’s proposal for a U.S. Bitcoin reserve is a bold vision of how digital assets could play a transformative role in reducing national debt and reshaping global finance. While the scenario of Bitcoin reaching $42.3 million per coin by 2049 remains speculative, the firm’s optimistic growth assumptions reflect growing confidence in Bitcoin’s potential to act as both a store of value and a global currency. As Bitcoin continues to gain acceptance at institutional and governmental levels, its role in the financial ecosystem may expand significantly, creating new opportunities and challenges for policymakers worldwide.