Bitcoin at $242,000…a shocking plan to reduce 38 trillion US debts

The Trump administration is considering a radical plan to convert part of US gold reserves into Bitcoin, in a move aimed at creating a strategic digital reserve and reducing the national debt, which has reached record levels of $38 trillion.

Senator Cynthia Lummis, from Wyoming, said that the idea is to sell or revalue US gold certificates to finance the purchase of Bitcoin, which could contribute to “cutting the national debt in half within 20 years.”

She explained that this step allows building a strategic reserve without the need for additional borrowing, taking advantage of the large potential returns of Bitcoin as a means of preserving value, according to Benzinga.

This idea is based on studies conducted by Michael Saylor, founder of Strategy Inc, and economist Arthur Laffer, who confirm that holding about 5% of the total global Bitcoin, or about 1 million coins, can achieve long-term returns much higher than holding stagnant gold.

Models indicate that rotating 5% of capital from gold to Bitcoin could raise the price of one digital currency to about $242,000.

Analysts estimate that US gold reserves, amounting to 261.5 million ounces, could generate about $1.3 trillion at a price of $5,000 per ounce, with the value potentially rising significantly if Bitcoin rises to six-figure levels as expected.

These proposals come at a time when the United States is facing increasing pressure due to the rising national debt.

The Treasury Department has added about a trillion dollars to the debt in just a few months, while the annual deficit has shrunk by about $350 billion this year, according to the White House.

However, administration spokesman Khush Desai emphasized that deep reforms and structural change are necessary to maintain financial stability in the long term.

Despite the theoretical attractiveness of the idea, economists warn of potential risks.

Selling large amounts of US gold could put pressure on global prices and weaken the credibility of reserves, while massive Bitcoin purchases could lead to sharp market fluctuations, threatening price stability.

Also, replacing a fixed reserve asset with a volatile asset may increase borrowing costs and reduce investor confidence in the US market.

Loomis stresses that inaction may be more risky, noting that investing in an asset with high potential returns such as Bitcoin may be an opportunity to regain financial control.

So far, Trump’s plan remains in the proposal stage, and observers are awaiting the reaction of markets and politicians to see whether it will turn into actual policy or remain just a theoretical discussion.