Trump’s unconventional plan to erase $35t debt

Former President Donald Trump suggested using Bitcoin to eliminate the US’s $35 trillion national debt.

The US national debt continues to rise, and the Republican presidential candidate has a bold idea to solve the problem: give Bitcoin (BTC) to China to pay off the US debt.

“Crypto is a very interesting thing. It’s very high-level in some ways, very high-level intellectually. But if we don’t do it, China will… maybe we pay off our $35 trillion debt, give them a little crypto check, right?” Trump told Fox News’ Maria Bartiromo. “We give them some Bitcoin, and we’ll wipe out our $35 trillion.”

This bold proposal is set to spark widespread discussion in the crypto world, but the feasibility of using cryptocurrencies to reduce the country’s financial debt comes with a number of challenges.

The US government currently holds 210,392 Bitcoins worth $13.3 billion, making it one of the largest holders of the currency.

At the time of writing, Bitcoin was trading around $63,000.

Trump math: How the United States can pay off its debt with Bitcoin

Believe it or not, in a perfect world where his price predictions were met, Trump might have achieved something. Here are some of the latest Bitcoin price targets from major financial institutions:

Fundstrat Global Advisors estimates that Bitcoin could reach $180,000 by the end of 2024, driven by spot Bitcoin ETF adoption. Standard Chartered recently revised its 2024 year-end target to $120,000 from $100,000, citing increasing institutional adoption and favorable market conditions.

Bernstein, an asset management firm with over $750 billion in assets, doubled down on its bold Bitcoin price prediction, raising its 2025 target from $150,000 to $200,000. ARK Invest projects a long-term price target of $600,000 by 2030, highlighting Bitcoin as a hedge against inflation and a store of value. Fidelity famously predicted that Bitcoin could reach $1 billion by 2038.

Based on the current price of Bitcoin, the US would need approximately 555,555,600 Bitcoins to pay off its debt.

If Bitcoin were to hit $180,000, the US would need 194,444,000 Bitcoins.

At a price of $280,000 per Bitcoin, the US would need 125,000,000 Bitcoins.

If the value of Bitcoin is calculated at $600,000, the US would need 58,333,000 Bitcoins.

With the value of Bitcoin calculated at $1,000,000, the United States would only need 35,000,000 Bitcoins.

And if Fidelity’s price prediction is correct and Bitcoin reaches $1 billion in 2038, the US will only need 35,000 Bitcoins.

While using Bitcoin to cancel the national debt may be intriguing, the feasibility of such an approach is questionable and is based on several economic and logistical challenges.

Bitcoin’s volatility, evolving regulatory environment, and significant trading volume must be taken into account. At the time of writing, Genesis Trading is beginning to sell its Bitcoin to pay off debt, causing a massive sell-off. Of course, many of the above scenarios represent unrealistic scenarios, as Bitcoin’s supply is capped at 21 million coins.

At the moment, Trump’s claim that a ‘small’ amount of Bitcoin can wipe out all US debt is premature, but if the US continues to buy and accumulate Bitcoin and its value increases, perhaps the country can become debt-free or at least reduce its massive multi-trillion dollar liability.