A prominent economist disagrees with Bitcoin supporters who say the cryptocurrency could one day solve the United States’ national debt.
Economist Peter Schiff expressed his doubts about the bold announcement of what he called “Bitcoin pumps” that 1 million BTC can cover the country’s national debt, saying that even with that amount of cryptos, it will still be enough to deal with the huge debt of the country’s government. .
Not Enough to Pay the US Debt
Schiff does not believe that 1 million Bitcoin is the answer to paying off the US national debt, arguing that to do that, the crypto needs to achieve an absurd increase of more than 20,000% in its market capitalization.
“#Bitcoin pumpers say that if the US buys 1 million Bitcoins, one day we will be able to use that Bitcoin to pay off the National Debt,” Schiff said in the post.
He explained that 1 million cryptocurrency coins will not be enough to solve the country’s huge debt of around $36 trillion.
#Bitcoin the pumpers say that if the US buys a million Bitcoin, one day we will be able to use that Bitcoin to pay off the National Debt. For 1 million Bitcoin to equal today’s National Debt of $36.25 trillion, Bitcoin’s market cap would be $761 trillion, 6x larger than the world’s GDP!
– Peter Schiff (@PeterSchiff) December 13, 2024
As of press time, Bitcoin is trading at $102,286 per coin. At current prices, a million Bitcoins would be more than $102 billion, which is a large sum but still small compared to the country’s massive debt of $36.25 billion.
The economist said that Bitcoin can only do this if the market capitalization increases by more than 20,000%, he doubts that BTC will ever reach that significant growth.
“For 1 million Bitcoins to equal Today’s National Debt of $36.25 trillion, the Bitcoin market would be $761 trillion, 6x larger than the world’s GDP,” he said.
Government Debt Continues to Grow
Schiff sees the total value of Bitcoin rising more than 200,000% as impossible, so BTC to pay the US debt is impossible.
The economist explained that when, if it happens, Bitcoin reaches $761 trillion in market capitalization the national debt will increase at that time, adding, “At that time the national debt will be much higher than $36.25 trillion, which requires a very high amount of Bitcoin to pay it off. “
He added that if the crypto market capitalization becomes too high, it is highly likely that its price will drop, which would not be a good sign for traders.
He asserted that the US debt is not fixed but rather increases over time, saying that the US government borrows money every year, so as a result, the national debt will continue to grow every year, making it even more difficult for Bitcoin to pay the national debt.
It is not yet a Universal Currency
Schiff questioned whether Bitcoin will be accepted globally as a fiat currency, noting that although BTC prices have risen, the crypto has not yet been used as a global currency.
“There will be no global adoption. So far very few people have found it at all,” Schiff noted.
He said that few countries have accepted Bitcoin as their official currency while many governments are still against the idea of ​​crypto as their currency.
“Bitcoin is a speculative asset, and its value is driven by hope, not actual demand,” he said.
Featured image from Pexels, chart from TradingView