Donald Trump’s ‘Little Crypto Check’ To Pay Off The US National Debt Might Not Work
- Donald Trump plans to implement a strategic Bitcoin reserve, suggesting that $BTC could be used to pay off US national debt.
- The US debt currently stands at $35T, increasing by $1T every 100 days.
- Trump's move shows his intention to court crypto voters for the upcoming presidential elections.
How do you control runaway US national debt? Buy Bitcoin ($BTC).
That's Donald Trump's latest idea for his planned Bitcoin strategic reserve. By hoarding $BTC (the US government as the ultimate HODLer?), Trump mused that the US would be able to write a little crypto check' to pay the national debt.
Both the Bitcoin strategic reserve and the suggestions for $BTC and the US national debt come as Trump faces being out-raised by his opponent's campaign in July.
The Math Problem Behind Trump's Bitcoin Strategic ReserveThe math behind Trump's debt payment idea overlooks the obvious. The current US national debt is $35T, while the total crypto market cap (for all currencies) is under $2T. That's a 17.5x difference.The market share for $BTC is $1T, so even holding one million $BTC (the number mentioned as a target for the strategic reserve) would barely make a dent in the debt as it currently stands.
But while the math doesn't check out, Trump has other reasons to suggest the move.
Talking Points for the Crypto President' - Overpromising or Not?Ever since the $BTC conference in Nashville in late July, Trump has worked overtime to cement his branding as the Crypto President.'
Paying the national debt using Bitcoin matches his narrative, and helps overwrite any memory of Trump's earlier comments about crypto as not money,' (2019) and how it seems like a scam' (2021).
I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity....
- Donald J. Trump (@realDonaldTrump) July 12, 2019
As part of his crypto revamp, Donald Trump's campaign has so far:
- Proposed various ways to integrate $BTC into the US financial system
- Pushed Trump to headline the Bitcoin conference
- Premiered the idea of a Bitcoin Strategic Reserve
- Promoted and pushed for crypto political donations
That last point hits close to home, as Vice President (VP)Kamala Harris more than doubled Trump's campaign donations in July ($310M to $138.7M).
Courting the crypto investors' vote (and the tech vote, through his VPselection, J.D. Vance) shows Trump's eagerness to cut into the donation gap and boost his odds of winning.
About That National Debt, It Might Not Be Going Anywhere...It's unlikely that a $BTC (or any other cryptocurrency) crypto reserve will resolve the current US national debt problem.
Adding $1T to the national debt every 100 days far outpaces even the wildest growth dreams for Bitcoin maximalists.
Conversely, $BTC investors shouldn't want the token to grow at the same rate - it would cause massive instability, and there's no such thing as repaying the US national debt in the 21st century.
But there may be a point to Trump's seemingly far-fetched idea. Positioning the US as a crypto leader plays well to his constituency. It also appeals to Bitcoin maximalists - if $BTC reaches $35M per token, then Trump's 1M Bitcoin reserve might just write that check after all.
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