The United States has never been in as much debt as it is today, and some believe the solution lies not in political reform or higher taxes, but in Bitcoin itself.
America’s national debt exceeds $38 trillion, nearly 31% higher than the country’s annual GDP.
Remarkably, this figure also marks one of the fastest-growing periods of debt in modern history. The Kobeisi letter noted that Washington has added more than $500 billion in new debt this month, or roughly $23 billion per day.
The company added that at this pace, “US bankruptcy is 100% certain to occur over a sufficiently long period of time.”
This warning set off alarm bells around the world, showing how unsustainable the US government’s current fiscal policy is.
But Bitcoin supporters saw this as evidence that fiat currencies have reached their reliability limits.
As a result, the ideas currently circulating through crypto forums and policy debates are both simple and radical. The question is: What if Bitcoin could one day help cancel the US debt?
US policy
At first glance, this theory sounds like digital-age alchemy, turning code into solvency. But the policy has gained surprising momentum amid widespread fiscal uncertainty.
Last year, President Donald J. Trump suggested during his presidential campaign that the United States could pay down its debt through Bitcoin. True to his beliefs, he approved the launch of the Strategic Bitcoin Reserve upon taking office and touted some of the benefits of this year’s top cryptocurrency.
The move has received significant support from the community, with crypto advocate Sen. Cynthia Lummis arguing that building a sovereign Bitcoin reserve could “strengthen the dollar with a solid, auditable asset.”
In her view, holding Bitcoin alongside U.S. Treasuries will do the same thing that gold once did. That means it will demonstrate credibility, hedge against inflation, and perhaps help pay down some of the debt in a few decades.
She said:
“[BTC]protects our debt with a hard asset and we can audit it at any time to prove our reserves.”
This once fringe rhetoric has resonated in a world of seemingly endless fiscal expansion. But if the US were to use Bitcoin to eliminate debt, how high would the flagship digital asset have to rise?
How high should U.S. Treasuries Bitcoin rise?
Mathematics seems elegant at first. If you divide the national debt of $38 trillion by the circulating supply of Bitcoin, 19.93 million BTC, you get a figure close to $1.9 million per coin.
At that price, Bitcoin’s market capitalization would rival the total debt of the U.S. government.
However, the moment you add reality to the equation, the equation breaks down. The US government does not own 19.93 million Bitcoins, only a small portion.
According to Bitcoin Treasury data, the United States currently holds approximately 326,373 BTC, or approximately 1.6% of the total supply of BTC, primarily acquired through seizures in criminal investigations.
If Washington were to use just that amount to settle the debt, the amount would explode significantly.
$38 trillion divided by 326,373 coins equals $116.5 million per Bitcoin. That’s about 1,000 times the current market price (nearly $108,000).
Once that valuation is reached, Bitcoin’s market capitalization will skyrocket to about $230 trillion, which is more than twice the world’s GDP.
On the other hand, even if prices somehow reached that height, the system would collapse long before the debt disappeared.
Bitcoin’s daily trading volume is around $60 billion to $70 billion, according to data from CoinMarketCap. This is just a fraction of the $7.5 trillion in liquidity found in the global bond or foreign exchange markets.
Therefore, attempting to liquidate a small portion of supply to “pay off” government debt immediately creates an eruption of demand and destroys price depth.
Furthermore, the amount of Bitcoin that can be traded is lower than most people assume.
According to a report by Chainalysis, approximately 20% of all coins mined (equivalent to approximately 4 million BTC) are permanently lost due to forgotten keys or wallet destruction.
This brings the effective circulation to nearly 16 million BTC. Adjusting for this, the so-called “debt parity” figure rises significantly, to over $2 million.
What the numbers show
While Bitcoin cannot literally eliminate America’s debt, this exercise exposes a deeper truth about modern finance.
This suggests that governments can create debt faster than the market can create reliable collateral. Every new loan widens the gap between what money represents and what it measures.
This asymmetry explains why Bitcoin continues to resonate in policy discussions and portfolio strategies alike. Its design, with a cap of 21 million BTC, stands in stark contrast to a financial system built on perpetual expansion. Once treated as a relic of the golden age, rarity has now become the most valuable commodity in money.
Each trillion increase in US debt reinforces Bitcoin’s finite supply versus infinite credit narrative. It also helps explain why institutional investor interest continues to deepen through speculative talk about spot ETFs, corporate bonds and even sovereign reserves.
For investors, Bitcoin has evolved into a macro hedge out of curiosity about a world where the denominator, the dollar itself, no longer feels fixed.
(Tag translation) Bitcoin
