After Donald Trump’s pivotal address at the Nashville Bitcoin conference in July 2024, Senator Cynthia Lummis introduced her Bitcoin reserve bill, clearly stating its objective to alleviate U.S. debt. New research from VanEck indicates that if the bill is enacted, Bitcoin could potentially offset 18% of the national debt before the government is permitted to sell its Bitcoin reserves.
On February 21, 2025, the investment management firm VanEck unveiled a tool designed to estimate the potential effects of the Strategic Bitcoin Reserve on U.S. debt under certain conditions. This tool allows the government to specify the quantity of bitcoins it acquires each year, the average purchase price for bitcoins in 2025, and the average compound growth rates for both Bitcoin prices and U.S. debt.
The calculator tool is grounded in VanEck’s research, which outlines how quickly the national debt could be mitigated by the Bitcoin reserve, given fixed parameters like Bitcoin prices. It is important to note that the research presupposes the passage of the Bitcoin Act introduced by Lummis will occur this year without significant adjustments.
The research webpage includes a disclaimer noting that the calculations rely on historical trends and may not accurately predict future Bitcoin prices or the national debt levels.
What insights can we draw from VanEck’s research?
The research operates on the premise that the U.S. Treasury will accumulate one million bitcoins over five years and retain them for two decades. According to the proposed legislation, during this period, the bitcoins held by the treasury could only be utilized to offset the national debt.
According to VanEck’s findings from December 2024, the U.S. is projected to compile one million bitcoins by 2049. The estimated total value of these bitcoins would reach $21 trillion, which would help reduce approximately 18% of the national debt, anticipated to be around $116 trillion by 2029, as per VanEck’s analysis.
These estimates are contingent on specific average compound growth rates of U.S. debt and Bitcoin prices. VanEck’s researchers predict that the national debt will increase by 5% annually, rising from the current valuation of $36 trillion to $116 trillion by 2049. VanEck also forecasts that Bitcoin’s value will grow on average by 25% annually, escalating from nearly $100,000 to $21 billion per coin by 2049 when federal restrictions on selling Bitcoin are lifted.
The government might acquire more than one million bitcoins, potentially obtaining extras through seizures, donations, and other avenues.
Overall, VanEck’s research suggests that the Strategic Bitcoin Reserve is unlikely to completely resolve U.S. debt issues in the immediate future, aligning with Lummis’s statement from July 2024, where she emphasized debt reduction rather than complete eradication.
To fully eliminate the national debt (assuming the growth rates hold true), the government would need to secure over five million bitcoins.
Is it possible for Bitcoin to completely eliminate U.S. debt?
In August 2024, during an interview on Fox, Donald Trump speculated that Bitcoin could potentially eliminate trillions of dollars of U.S. debt.
Even without considering possible debt growth (the Congressional Budget Office estimates debt could reach around $50 trillion by 2035), the U.S. would require 36 million bitcoins priced at $1,000,000 each (a valuation frequently cited by Bitcoin enthusiasts for the near future).
However, such a quantity of bitcoins is unattainable, as the total supply is capped at 21 million, with its built-in scarcity being a key factor in its value.
The largest holder of bitcoins is BlackRock, which, as of February 2025, possesses over half a million bitcoins. Another prominent Bitcoin advocate, Michael Saylor of Strategy, remarked that “there’s only room for one nation-state to buy up 20% of the Bitcoin network,” demonstrating that he doesn’t consider allocating a third of the supply to any nation, despite his ownership of around half a million bitcoins.
Gathering even one million bitcoins is daunting; no wonder Senator Lummis, a staunch Bitcoin supporter, has given the U.S. government five years to achieve this objective. The Bitcoin price would need to hit $36 billion by 2030 for the Strategic Bitcoin Reserve to be viable in addressing U.S. debt (though, likely, the debt will have increased by then). Even the most optimistic forecasts fall short of this claim.
Another challenge is that converting these bitcoins to cash won’t be straightforward, as the U.S. must find sufficient buyers. Selling such a large amount would negatively impact the price, diminishing the value of remaining reserves.
Ultimately, it is reasonable to conclude that while Bitcoin may serve as a partial solution, Trump’s assertion of Bitcoin eliminating U.S. debt is unfounded at this point.
