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Can the state debt be reduced with Bitcoin?
Ki Young Ju, the CEO of CryptoQuant, recently discussed the possibility of using Bitcoin to reduce the national debt. He pointed out that the massive inflow of capital into the market over the past 15 years has increased the value of Bitcoin from $790 billion to $2 trillion. According to his statement, if the US government were to strategically use Bitcoin as a reserve asset, it could potentially offset up to 36% of its domestic debt by acquiring 1 million BTC by 2050.
This would not necessarily require all debts to be repaid in Bitcoin, but rather serve as a means to diversify the national reserves. However, it is acknowledged that there may be resistance from foreign creditors who currently hold 30% of the US debt. This approach could also create a challenge in achieving consensus among lenders due to the volatility of Bitcoin compared to traditional assets such as gold or the dollar.
Notably, Michael Saylor, CEO of MicroStrategy, has estimated that the US government could earn up to $81 billion by building a Bitcoin reserve. The potential risks associated with this strategy are not ignored, but it is also emphasized that long-term Bitcoin holders (“whales”) may sell large quantities to undermine such a plan.
Despite this, Ki Young Ju remains optimistic about the prospects of using Bitcoin as a strategic asset, citing the possibility that the rise in value and the growing acceptance of cryptocurrencies could keep even whales from selling.
Source: www.bitcoinbazis.hu
