Originally published on: November 20, 2024
According to the president of a nonprofit think tank, setting up a strategic Bitcoin reserve, as proposed by US Senator Cynthia Lummis, may not be the silver bullet solution to the country’s escalating $35 trillion debt crisis.
At the North American Blockchain Summit 2024 in Dallas, Texas, Avik Roy from the Foundation for Research on Equal Opportunity expressed skepticism about the effectiveness of using Bitcoin to eliminate the federal debt. While acknowledging that a scenario where the US acquires a substantial amount of Bitcoin that appreciates could help, Roy believes it will not fully address the mounting debt that has been ballooning since the 1980s.
Roy did note that such a move could potentially ease tensions in the bond market. However, he expressed concerns about the possibility of the US depleting its Bitcoin reserves, drawing parallels to the depletion of gold reserves in the 1970s.
Since 1981, the US national debt has been on the rise, growing at an annual rate of 5.3%. Despite the introduction of the Bitcoin Act by Senator Lummis, which suggests the US government should acquire 1 million BTC to hold for at least 20 years, the road to using Bitcoin as a debt solution remains contentious.
This proposal also includes converting a portion of the US Treasury’s gold holdings into the proposed Bitcoin reserve. While this may seem like a bold step, it may not be enough to mitigate the current debt crisis.
With President-elect Donald Trump also pledging to create a national Bitcoin stockpile, the future of Bitcoin in tackling the US debt crisis remains uncertain.
As the debate over Bitcoin’s role in financial strategies rages on, the question remains: Can a Bitcoin reserve really save the day for the US debt crisis? Join the conversation and stay informed on the latest crypto news. Subscribe to our newsletter for the latest updates every Monday.
