he CEO of CryptoQuants also stated that it supports the idea that the US could cut its national debt by implementing a Bitcoin Reserve strategi. He points out that approximately $790 billion in capital inflows have taken Bitcoin to a $2 trillion market capitalization in approximately 15 years.
Implementation Challenges
Though it appears quite reasonable on paper, the application of Bitcoin as a reserve currency is problematic. The high fluctuations in the value of the cryptocurrency and its status as a ‘pumpable’ ASSET could complicate the achievement of creditor consensus even with domestic creditors, not to mention foreign ones.
Strategic Planning
This proposal reveals that buying one million Bitcoins and by 2050 can neutralize 36% of the US domestically held debt provided that Bitcoin is categorized as a strategic asset. They argue that this approach inaugurates a new modality of managing debt and may decrease reliance on inflationary policies.
Economic Analysis
VanEck’s Matthew Sigel adds more information offering that five-years plan to accumulate Bitcoin costing $200,000 per coin. According to the analysis, there can be considerable savings on national debts in future up to 2049 in case of favorable conditions.
Bitcoin Reserve Proposal
Despite the challenges, the proposal shows that with an increasing sophistication of cryptocurrency markets, countries may turn to decentralized tokens to manage their debts.
