Former U.S. President Donald Trump recently proposed the bold idea of using Bitcoin (BTC) to repay the government’s staggering $35 trillion debt. Trump made this suggestion during an interview with Fox Business, marking yet another initiative related to the crypto asset industry ahead of the November elections.
Trump expressed concerns about the future development of the dollar, stating that as the world’s largest economy, the U.S. accumulates approximately $1 trillion in debt every 100 days, leading to persistently high inflation rates. The Federal Reserve appears overwhelmed by the numerous economic challenges it faces.
Over the past year, Trump has actively courted the BTC community, a stark contrast to his 2019 assertion that digital currencies were a scam. At that time, he did not recognize the potential of the U.S. crypto asset community, which now boasts over 10 million voters.
Recently, he has taken significant measures to address the concerns of ordinary crypto asset users, including the negative attitude of the U.S. Securities and Exchange Commission (SEC) 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 confirmed this commitment, as he stated his support for purchasing BTC to save the dollar and maintaining strategic reserves of crypto assets, while opposing the sale of billions of dollars of BTC holdings by the U.S. government.
Additionally, Trump promised to dismiss SEC Chairman Gary Gensler on the first day of his potential term from 2025 to 2029, exceeding 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 the polls. For his opponents to gain the support of crypto asset users would be a formidable task.
Currently, BTC’s market capitalization is slightly above $1.1 trillion, with approximately $300 billion not in circulation. Considering this valuation, repaying the U.S. $35 trillion national debt with BTC is currently unfeasible. However, due to the unsustainable borrowing behavior of the U.S. government and the deflationary characteristics of BTC, many expect the value of crypto assets to steadily increase relative to the dollar. Therefore, theoretically, it is conceivable to repay a significant portion of the national debt through substantial holdings of BTC.
However, whether a large number of U.S. debt holders would be willing to accept repayment in Bitcoin remains to be seen. Typically, investors purchasing bonds seek stable returns, and the volatility associated with BTC may not meet their needs. Additionally, the logistics of payment would also pose a challenge. Should they be willing to accept it, it could potentially broaden the acceptance of cryptocurrencies among the population.
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