VanEck's Head of Digital Assets Research Lays Out a Vision for How the U.S. Treasury Could Use Bitcoin to Strengthen Its Balance Sheet

VanEck's Head of Digital Assets Research, Matthew Sigel, has laid out a vision for how the U.S. Treasury could use Bitcoin (BTC) to strengthen its balance sheet.

VanEck’s Head Of Digital Assets Research envisions U.S. Treasury using Bitcoin to bolster its balance sheet.

What Happened: VanEck’s Head of Digital Assets Research, Matthew Sigel, laid out a vision in a post on X on Friday, highlighting VanEck’s estimates.

If Bitcoin appreciates at 25% annually, rising from $100,000 today to $21 million per BTC by 2049, the reserve could offset 18% of the projected U.S. debt.

This assumes debt grows at 5% annually, reaching $116 trillion by 2049 (up from $36 trillion in 2025).

While this theory is optimistic, it underscores Bitcoin’s potential as a sovereign reserve asset and a hedge against inflationary debt expansion.

The BITCOIN Act, introduced by Wyoming Senator Cynthia Lummis, proposes the U.S. accumulate 1 million BTC over five years and hold it for at least 20 years as a strategic Bitcoin reserve.

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The BITCOIN Act, introduced by Wyoming Senator Cynthia Lummis, proposes the U.S. accumulate 1 million BTC over five years and hold it for at least 20 years as a strategic Bitcoin reserve. Image: ProPublica

The U.S. national debt stood at $31.4 trillion as of January 2023, according to the U.S. Department of the Treasury.

Meanwhile, Polymarket now prices in a 44% chance of a U.S. National Bitcoin Reserve in 2025, up from 39% earlier this month.

Kalshi data sees a 59% probability that Trump would establish a Bitcoin Reserve if elected, up from 53.8% on Feb. 12.

Arkansas is set to become the first state to establish a Bitcoin reserve, with amendments expected by March 5.

Meanwhile, Texas is preparing to debate the proposal in its Senate.

Institutions like VanEck, Grayscale, and Digital Currency Group are among those credited with driving the institutional adoption of cryptocurrencies.

These firms have launched various crypto funds, trusts, and exchange-traded funds (ETFs), making digital assets more accessible to mainstream investors.

The increasing institutional involvement has also contributed to the maturation of the cryptocurrency market.

Now, some institutional players are shifting their focus to the potential role of cryptocurrencies in national economies and sovereign wealth funds.

This line of thinking has been fueled by the economic challenges faced by several countries, including high inflation and rising debt levels.

As an example, a recent analysis by VanEck suggests that if the U.S. Treasury were to allocate a portion of its balance sheet to Bitcoin, it could potentially offset a significant amount of the projected national debt over the next 25 years.

The analysis assumes that Bitcoin will continue to appreciate at a rate of 25% annually, reaching a price of $21 million per BTC by 2049.

During this period, the U.S. debt is expected to grow at 5% annually, reaching $116 trillion by 2049 (up from $36 trillion in 2025).

Based on these projections, VanEck estimates that if the U.S. Treasury were to hold 5 million BTC by 2049, it could offset approximately 18% of the national debt.

This calculation is derived by multiplying the projected price of Bitcoin in 2049 ($21 million) by the number of BTC held (5 million) and then dividing the result by the estimated U.S. debt in 2049 ($116 trillion).

While this theory is highly optimistic and subject to various uncertainties, it underscores Bitcoin’s potential as a sovereign reserve asset and a hedge against inflationary debt expansion.

The analysis also highlights the increasing institutional interest in exploring the broader macroeconomic implications of cryptocurrencies.