Can Bitcoin be the US’s remedy to a $38 trillion debt crisis?

The US has never owed more money than it does today, and some believe the solution is not political reform or higher taxes, but higher taxes bitcoin alone.

The U.S. national debt exceeded $38 trillion and exceeded the country’s annual GDP by nearly 31%.

It is noteworthy that the number also indicates one of the the fastest period of debt accumulation in modern history. Kobeissi’s letter pointed out that Washington added more than $500 billion in new debt this month, or about $23 billion a day.

The firm added that at this rate, “there is a 100% certainty of US bankruptcy with a long enough time frame.”

This warning rang alarm bells around the world as it showed how unsustainable the US government’s current fiscal policy is.

However, Bitcoin proponents saw this as evidence that fiat money had reached a limit of credibility.

As a result, an idea now circulating in crypto forums and political debates is as radical as it is simple: what if Bitcoin could one day help erase America’s debt?

US politics

At first glance, this theory sounds like the alchemy of the digital age, turning code into solvency. Still, it has gained surprising traction as fiscal anxiety spreads.

Last year, during his campaign for the presidency Donald J. Trump suggested that the United States could clear your debts through bitcoin. True to his convictions, he approved the launch of a Strategic Bitcoin Reserve when rising and offered several benefits of top cryptocurrencies this year.

The move received considerable community support with cryptocurrency advocate Senator Cynthia Lummis argue that the building a Sovereign Bitcoin Reserve could “back the dollar with a hard, auditable asset”.

In her view, holding bitcoin alongside Treasuries would do what gold once did: signal credibility, hedge against inflation and perhaps help retire a fraction of the debt decades from now.

She said:

“[BTC will] secure our debt with a fixed asset + we can review it at any time to prove reserves.”

This rhetoric, once fringe, resonates in a world where fiscal expansion seems endless. But if the U.S. were ever to try to use bitcoin to settle its liabilities, how high would the flagship digital asset have to climb?

How high does BTC have to go for US debt?

Mathematics looks elegant at first glance. Divide the $38 trillion national debt by Bitcoin’s circulating supply of 19.93 million BTC and you arrive at a figure of nearly $1.9 million per coin.

At this price, the total market capitalization of Bitcoin would be equivalent to the entire debt load of the US government.

But the equation breaks the moment you add reality. The US government does not own 19.93 million bitcoins, it only owns a fraction.

According to Bitcoin Treasuries, the US currently holds about 326,373 BTC, or roughly 1.6% of the total BTC supply, which was primarily acquired through seizure from criminal investigation.

If Washington tried to use just that amount to pay off its debt, the number would explode significantly.

Divide $38 trillion by 326,373 coins, resulting in $116.5 million in Bitcoin. That’s about 1,000 times the current market price of nearly $108,000.

At this valuation, Bitcoin’s total market capitalization would soar to roughly $230 trillion, more than twice the world’s GDP.

Meanwhile, even if prices somehow reached those heights, the mechanics would break down long before the debt disappeared.

Bitcoin stores around $60-70 billion in daily volume according to CoinMarketCap data. This represents only a fraction of the $7.5 trillion in liquidity seen in the global bond or FX markets.

So an attempt to liquidate even a small proportion of supply to “pay off” government debt would immediately reduce demand and destroy price depth.

Additionally, there is less to trading Bitcoin than most assume.

AND Chain analysis The report suggests that about 20% of all mined coins, representing nearly 4 million BTC, are permanently lost due to forgotten keys or destroyed wallets.

This leaves nearly 16 million BTC in effective circulation. Adjust that and the so-called “debt parity” figure rises significantly to more than $2 million.

What the numbers show

While Bitcoin cannot literally extinguish the US debt, the exercise reveals a deeper truth about modern finance.

It shows that governments can create liabilities faster than markets can create credible collateral. Each new loan widens the gap between what money represents and what it measures.

This asymmetry explains why bitcoin continues to resonate in policy debates and portfolio strategies. Limited to 21 million BTC, its design stands in silent contrast to a financial system built on perpetual expansion. Scarcity, once considered a holdover from the golden age, has become the most valuable commodity in money.

Every trillion added to the US debt reinforces the Bitcoin story of limited supply versus infinite credit. It also helps explain why institutional interest continues to deepen through spot ETFs, corporate treasuries 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.