The post VanEck Research Head Details How a Strategic Bitcoin Reserve Could Help the US Debt Problem appeared on BitcoinEthereumNews.com.

Matthew Sigel, Head of Digital Assets Research at VanEck, outlines how the strategic Bitcoin Reserve could help the United States’ growing debt problem. His disclosure makes some assumptions for the growth of Bitcoin and the U.S. debt in the future. The recent commentary comes shortly after Sigel confirmed that VanEck endorses the concept, especially after asset management giant BlackRock declined to do so.   Sigel’s calculations present a conservative picture of how Bitcoin reserves could reduce the burden of rising national debt.   How the Strategic Bitcoin Reserve Could Help National Debt Problem For context, the model assumes that by 2025, the U.S. Treasury starts acquiring 1 million Bitcoin over a five-year period at an average price of $250,000 per BTC. This is in line with Senator Cynthia Lummis’ proposal.  Assume the US Treasury starts buying 1M Bitcoin over 5 years at a starting price of $250k. Assume US debt grows at 5% (vs. last 10 years 8% CAGR) & BTC price compounds at 25%. In such a scenario, the US Strategic BTC Reserve would hold assets equivalent to 44% of debt by 2050. pic.twitter.com/sm7RhRAa8d — matthew sigel, recovering CFA (@matthew_sigel) November 29, 2024 Sigel also assumes that the national debt will grow at 5% annually—a reduction compared to the past decade’s 8% compounded growth rate—reaching approximately $119.3 trillion by 2049. Additionally, he estimates Bitcoin’s price to grow at 25% annually, much lower than its historical 50% 10-year compound annual growth rate.   Under these assumptions, the value of the Bitcoin reserve by 2049 would reach $52.9 trillion, equivalent to 44.4% of the projected national debt. This analysis has fueled further discussions.  Some questioned whether a 25% annual growth rate for Bitcoin is realistic over 25 years. Sigel pointed out Bitcoin’s historical performance but suggested lowering the projection to 20% CAGR, which would…

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Filed under: News - @ December 16, 2024 8:21 pm