The US has never owed as much money as it does now, and some believe the solution lies not in political reforms or higher taxes, but in Bitcoin itself.
The US national debt has surpassed $38 trillion, exceeding the country’s annual GDP by nearly 31%.
Strikingly, this figure also marks one of the fastest periods of debt accumulation in modern history. The Kobeissi letter pointed out that Washington added more than $500 billion in new debt this month, or about $23 billion a day.
The company added that at this rate there is “100% certainty of a US bankruptcy within a sufficiently long timeframe.”
This warning raised alarm bells around the world as it showed how unsustainable the US government’s current fiscal policy was.
Bitcoin proponents, however, saw this as evidence that fiat money has reached the limits of credibility.
As a result, the idea now circulating through crypto forums and policy debates is as radical as it is simple: what if Bitcoin could one day help erase America’s debt?
American policy
At first glance, the theory sounds like digital-age alchemy, turning code into solvency. Yet it has surprisingly gained ground as budget fears spread.
Last year, President Donald J. Trump suggested during his election campaign that the United States could pay off its debt through Bitcoin. True to his beliefs, he approved the launch of a strategic Bitcoin reserve at the ascension and touted the various benefits of the top crypto this year.
This move has attracted significant support from the community, including from crypto advocate Senator Cynthia Lummis argue that building a Sovereign Bitcoin Reserve “could support the dollar with a hard, verifiable asset.”
In her view, holding Bitcoin alongside government bonds would do what gold once did: project credibility, hedge inflation and perhaps, decades from now, help pay off a fraction of the debt.
She said:
“[BTC will] secure our debt with a hard asset + we can check it at any time to show reserves.”
This rhetoric, once marginal, resonates in a world where fiscal expansion seems endless. But if the US were to ever try to use Bitcoin to pay off its obligations, how high would the flagship digital asset have to rise?
How High Should BTC Climb for US Debt?
The math seems elegant at first glance. Divide $38 trillion in national debt by Bitcoin’s circulating supply of 19.93 million BTC, and you arrive at a figure of almost $1.9 million per coin.
At that price, Bitcoin’s total market capitalization would match the entire debt burden of the US government.
But the comparison breaks down once you add reality. The US government does not own 19.93 million Bitcoin, it only owns a fraction.
According to data from Bitcoin Treasuries, the US currently owns approximately 326,373 BTC, or about 1.6% of the total supply of BTC, which was primarily acquired through seizures from criminal investigations.
If Washington tried to use just that amount to pay off its debts, the number would explode significantly.
Divide $38 trillion by 326,373 coins, resulting in $116.5 million per Bitcoin. This is approximately 1,000 times higher than the current market price, almost $108,000.
At that valuation, Bitcoin’s total market capitalization would rise to roughly $230 trillion, which is more than double global GDP.
Meanwhile, even if prices somehow reached these heights, the mechanisms would collapse long before the debts disappeared.
Bitcoin trades in volume of approximately $60-$70 billion daily, according to CoinMarketCap facts. This represents just a fraction of the $7.5 trillion in liquidity seen in global bond or currency markets.
Thus, an attempt to liquidate even a small portion of supply to repay the national debt would immediately reduce demand and destroy price depth.
Plus, there is less Bitcoin to trade than most think.
A Chainalysis report has suggested that around 20% of all mined coins, representing almost 4 million BTC, are permanently lost due to forgotten keys or destroyed wallets.
That leaves closer to 16 million BTC in effective circulation. If you correct for that, the so-called “debt parity figure” increases significantly to more than $2 million.
What the numbers show
While Bitcoin can’t literally cancel America’s debt, the exercise exposes a deeper truth about modern finance.
It shows that governments can create liabilities faster than markets can produce credible collateral. Every new loan widens the gap between what money represents and what it measures.
That asymmetry explains why Bitcoin continues to resonate in policy debates and portfolio strategies. Its design, capped at 21 million BTC, stands in quiet contrast to a financial system built on constant expansion. Scarcity, once treated as a relic of the gold age, has become the most valuable commodity in money.
Every trillion added to the US debt reinforces Bitcoin’s narrative of finite supply versus infinite credit. It also helps explain why institutional interest is increasing through spot ETFs, corporate bonds and even speculative talk of government reserves.
For investors, Bitcoin has evolved from a curiosity to a macro hedge against a world where the denominator, the dollar itself, no longer feels fixed.
