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Debt and Bitcoin

Written by Kerby Anderson March 24 - 2025
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The U.S. has two debt problems: one long term and one short term. The first problem is a national debt of $36 trillion that has been increasing. Also concerning is the fact that the rate of indebtedness is also increasing.

The second problem is the current need to refinance so many federal treasuries this year. These T-bills are how we finance our debt, and $7 trillion of debt needs to be financed, along with the $2 trillion deficit this year. That means $9 trillion of current debt needs to be purchased.

Who is going to buy our debt? Not China, probably not Japan or any country in Europe. We need something to entice countries and companies to buy our debt.

Bitcoin might be the answer. At the Bitcoin Policy Institute, Michael Saylor ran models to show how investing in the bitcoin strategic reserve would build assets to offset the growing national debt. I mentioned that in a previous commentary.

But another presentation proposed a bitcoin bond (called a bit bond) that would increase an investor’s interest in buying bonds. Most of the purchase would go to the government, but a portion of the purchase would go to buy bitcoin. At maturity, the holder would receive all the upside price appreciation of bitcoin to a certain level. After that the additional appreciation would be split by half with the government.

The benefit to the holder would be an investment that likely would return a better percentage than normal. The benefit to the government would be the purchasing of bitcoin for the strategic reserve that is “budget-neutral” as required by the executive order signed by President Trump earlier this month.

Bitcoin might be way to pay off our national debt in the future but also attract needed investors to finance our debt today.viewpoints new web version

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