Former President Donald Trump recently proposed an unconventional solution to the United States’ staggering $35 trillion national debt: using Bitcoin or a “crypto check.” In an interview with Fox News’ Maria Bartiromo, the 2024 GOP presidential candidate expressed admiration for the crypto industry and emphasized the importance of the U.S. embracing digital assets to remain competitive globally.
Trump’s suggestion of using Bitcoin to address the national debt stems from his belief in the potential of cryptocurrencies to absorb inflation and offer a more stable financial system. He remarked, “Who knows, maybe we’ll pay off our $35 trillion dollar [national debt], hand them a little crypto check, right? We’ll hand them a little Bitcoin and wipe away our $35 trillion.”
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Bitcoin as a Hedge Against Inflation
The former president’s comments highlight concerns about the U.S. government’s ongoing devaluation of the dollar. As more currency is printed to service existing debts, the risk of inflation increases. Bitcoin, with its supply-capped nature, is seen by some as a hedge against such monetary policies. The idea is that by converting U.S. dollars into Bitcoin, the value could be preserved or even appreciated, potentially providing a way to manage or pay down the national debt.
The national debt’s rapid growth is alarming, with the U.S. adding roughly $1 trillion every 100 days. To put this into perspective, it took about 200 years for the national debt to reach $1 trillion, a figure now added roughly every three months due to deficit spending. In June alone, 76% of all income tax revenue was allocated to interest payments on the debt, making it one of the largest budget expenditures.
The Case for a Bitcoin Reserve
Trump’s suggestion aligns with recent discussions among some politicians about incorporating Bitcoin into the U.S. financial system. Robert F. Kennedy Jr., a presidential candidate, recently advocated for a Bitcoin reserve to help manage the national debt as Bitcoin appreciates in value. Similarly, Senator Cynthia Lummis of Wyoming introduced a bill proposing the establishment of a Bitcoin strategic reserve. The goal is for the U.S. Treasury to acquire 5% of Bitcoin’s total supply and hold it for at least 20 years, aiming to counteract the negative effects of excessive monetary printing and maintain the U.S.’s financial dominance globally.
