The notion that Bitcoin could eliminate the US national debt is an “exaggeration” of the cryptocurrency’s capabilities, according to Avik Roy, president of the Foundation for Research on Equal Opportunity, as reported by Cointelegraph.
The expert was responding to an initiative by Senator Cynthia Lummis, who proposed a bill suggesting the purchase of 1 million BTC (no more than 200,000 BTC per year over five years) using the gold reserves of the Federal Reserve.
In July, Donald Trump suggested using Bitcoin to settle the country’s obligations to creditors.
According to Roy, the leading cryptocurrency would be powerless against the $35.46 trillion national debt, which has been growing almost exponentially since the 1980s (CAGR of 5.3%).
“A Bitcoin reserve does not solve the problem. Budgetary reforms will still be necessary to eliminate the $2 trillion annual deficit,” the expert stated.
The initiative might ease pressure on the bond market, but the US could deplete Bitcoin reserves as it did with gold in the 1970s, Roy noted.
Previously, Galaxy Digital’s CEO Mike Novogratz predicted a Bitcoin price of $500,000 if a strategic reserve were established in the US.
Earlier, MicroStrategy founder Michael Saylor described a Bitcoin reserve as “the best deal of the 21st century.”