Can Bitcoin Solve the $35 Trillion US Debt Crisis? Senator Lummis and Michael Saylor Weigh In
Senator Lummis introduced a bill to establish a strategic Bitcoin reserve to address the national debt. | Credit: Bill Clark/CQ-Roll Call, Inc via Getty Images
Key Takeaways
- Senator Lummis introduced a bill to establish a strategic Bitcoin reserve to address the national debt.
- The plan includes acquiring 1,000,000 Bitcoins over five years, aiming to secure these assets in highly secure vaults.
- The proposal faces significant challenges due to the vast discrepancy between the U.S. national debt and the market capitalization of Bitcoin.
The U.S. national debt has recently surpassed $35 trillion , a staggering figure highlighting the country’s ongoing fiscal challenges.
This massive debt burden, exacerbated by the economic impacts of the COVID-19 pandemic and increased government spending, represents a pressing issue for the economy.
As inflation continues to affect everyday life, the implications of this rising debt are significant, impacting everything from government policy to individual financial stability. Regulators and central banks are scrambling to find a solution.
Amidst this, Bitcoin is gaining attention as a potential solution.
Lummis Thinks Bitcoin is a Solution to U.S. Debt
Following President Trump’s recent endorsement of maintaining the U.S.’s Bitcoin holdings, Senator Cynthia Lummis (R-Wyo.) took to X to advocate for a strategic use of Bitcoin to manage national debt.
Lummis iterated that America didn’t have to fall victim to a debt spiral.
“We can pull ourselves out of this using bitcoin, digital gold, to materially reduce our debt,” Lummis asserted .
The Wyoming Senator is ambitious about acquiring 5% of the total Bitcoin supply and setting up Bitcoin vaults nationwide. Her strategic Bitcoin proposal has gained favor from many in the crypto industry, particularly the Bitcoin king himself, Michael Saylor.
Michael Saylor Calls For Bitcoin Strategic Reserve
In a recent interview, Michael Saylor, MicroStrategy chairman, likened the U.S. purchasing a Bitcoin strategic reserve to the historic Louisiana Purchase.
Saylor supported Senator Lummis’ BITCOIN Act and highlighted the historical significance of such acquisitions, comparing it to Thomas Jefferson’s expansion of U.S. territory in 1803 and emphasizing Bitcoin’s potential long-term value as a “scarce, desirable digital property.”
He stated:
“Thomas Jefferson purchased the Louisiana Territory for $15 million in 1803 and nearly doubled the size of the United States. Bitcoin is scarce, desirable digital property. It’s a great idea to trade a little bit of currency or paper for someplace that billions of people are gonna want to be in 100 years.”
In the interview, Saylor also highlighted the increasing interest from U.S. political figures and proposed that nations incorporating Bitcoin into their reserves could pave the way for both institutional and private investments. He urged investors to commit to Bitcoin, emphasizing its potential for substantial long-term wealth growth.
Saylor’s firm, MicroStrategy, held about $8 billion in Bitcoin at the time of writing.
Speaking at the Bitcoin 2024 conference on July 26, Saylor predicted that Bitcoin’s value could soar to $13 million per coin by 2045. According to his estimates, MicroStrategy’s 226,331 BTC stash could be worth $3 trillion.
Lummis’ BITCOIN Act
Initially introduced at the Bitcoin Conference in Nashville, Senator Lummis’ Boosting Innovation, Technology, and Competitiveness through Optimized Investment Nationwide (BITCOIN) Act of 2024 proposes to secure the federal government’s Bitcoin holdings through a network of highly secure storage vaults and a purchase program.
The initiative would start with 210,000 Bitcoins seized by law enforcement and strategically stored across multiple secure locations to mitigate risks.
Lummis aims to accumulate 1,000,000 Bitcoins over the next five years, representing approximately 5% of the global Bitcoin supply. The goal is to hold these assets for at least 20 years and use them to reduce the U.S. national debt.
Following this, the U.S. Treasury would be unable to offload more than 10% of assets over two years.
Lummis’ Bitcoin Act has received an outpouring of love. The Digital Chamber, a prominent blockchain advocacy association, hand-delivered over 2,200 letters to U.S. Senators asking for a vote in favor of the bill.
