Former U.S. President Donald Trump has recently proposed the bold idea of using Bitcoin (BTC) to pay off the government’s massive $35 trillion debt. This opinion was expressed by Trump during an interview with Fox Business. This marks another initiative related to the crypto asset industry that Trump has put forth ahead of the November elections.
Concerns about the future of the U.S. dollar have been raised, as the country, being the world’s largest economy, adds approximately $1 trillion in debt every 100 days, resulting in persistently high inflation rates. The U.S. Federal Reserve appears overwhelmed by the numerous economic challenges it faces.
Over the past year, Trump has been actively courting the BTC community, a stark contrast to his 2019 statement labeling digital currency as a scam. At that time, Trump did not recognize the potential of the U.S. crypto asset community, which now boasts over 10 million voters.
Recently, he has taken significant steps to address the concerns of ordinary crypto asset users. These include the U.S. Securities and Exchange Commission’s (SEC) negative stance towards the digital currency economy, the right to self-custody using private wallets, and high taxation.
Trump has pledged to resolve these issues if he returns to power. His remarks at the 2024 BTC conference reaffirmed this commitment. He stated his support for purchasing BTC to save the dollar and maintaining a strategic reserve of crypto assets while opposing the sale of billions of dollars worth of BTC holdings by the U.S. government.
Additionally, Trump promised to dismiss SEC Chairman Gary Gensler on the first day of his term from 2025 to 2029. This goes beyond the longstanding demands of the crypto asset community towards the U.S. government.
Given the Democratic Party’s skepticism towards BTC, Trump continues to lead in polling numbers. The opposition will face a daunting task in winning support from crypto asset users.
Currently, BTC’s market capitalization is slightly above $1.1 trillion, with approximately $300 billion not in circulation. Considering this valuation, using BTC to pay off the $35 trillion U.S. national debt is currently unfeasible.
However, many anticipate that due to the unsustainable borrowing practices of the U.S. government and the deflationary characteristics of BTC, the value of crypto assets will steadily rise relative to the dollar. Thus, theoretically, it could be conceivable to pay off a significant portion of the national debt through substantial BTC holdings.
Nevertheless, whether a large number of U.S. debt holders would be willing to accept repayment in Bitcoin is a matter that requires long-term consideration. After all, investors who typically buy bonds seek stable returns, and the volatility of BTC may not align with their needs. Moreover, how the payment would be executed is also a question.
If they are willing to accept it, this could potentially expand the demographic of individuals accepting cryptocurrency.
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