The price of Bitcoin needs to pump 1000 times to eliminate the 38 trillion dollar debt of the United States!

The U.S. national debt has exceeded 38 trillion dollars, which is nearly 31% of the country's annual GDP. President Trump suggested during his campaign that the U.S. could repay its debt through Bitcoin, and this year approved the establishment of a strategic Bitcoin reserve. However, how high does the price of Bitcoin need to rise to achieve this goal? Dividing 38 trillion dollars by the circulating supply of 19.93 million BTC results in each Bitcoin needing to reach 1.9 million dollars.

The grim reality of the 38 trillion dollar debt crisis

(Source: The Kobeissi Letter)

The United States has never owed such a huge debt as it does today. Some believe that the solution is not political reform or tax increases, but Bitcoin itself. The U.S. national debt has exceeded $38 trillion, which is nearly 31% of the country's annual GDP. Notably, this figure also marks one of the fastest periods of debt accumulation in modern history. The Kobeissi letter points out that Washington added more than $500 billion in debt this month, equivalent to an increase of about $23 billion per day.

The company added that at this rate, “as long as there's enough time, the likelihood of bankruptcy in the United States is 100%.” This warning has sounded the alarm for the entire world, highlighting the unsustainability of the current fiscal policies of the U.S. government. However, Bitcoin supporters believe this proves that fiat currency has reached the limits of its credibility.

Therefore, the idea circulating in crypto forums and policy debates is both radical and simple: what if Bitcoin could one day help eliminate the U.S. debt? At first glance, this theory sounds like alchemy of the digital age, turning code into solvency. However, as fiscal anxiety spreads, it has gained surprising attention.

Last year, President Trump proposed during his campaign that the United States could pay off its debt through Bitcoin. Upholding this idea, he approved the establishment of a strategic Bitcoin reserve this year and strongly promoted many advantages of this top cryptocurrency. This move received strong support from the community, and cryptocurrency advocate Senator Cynthia Lummis believes that establishing a sovereign Bitcoin reserve can “back the dollar with hard, auditable assets.”

In her view, holding Bitcoin and U.S. Treasuries can serve the same purpose that gold once did: demonstrating credibility, hedging against inflation, and even helping to pay off part of the debt decades later. She said, “BTC will use hard assets to back our debts, and we can audit it at any time to prove our reserves.” This once-marginalized rhetoric resonates in a world where fiscal expansion seems endless.

The theoretical calculation for the Bitcoin price needs to reach 1.9 million USD

But if the United States really tries to use Bitcoin to pay off its debts, to what extent would the price of Bitcoin need to rise? This mathematical problem seems elegant at first glance. Dividing the 38 trillion dollars of national debt by the circulating supply of 19.93 million BTC, you will get a figure close to 1.9 million dollars per Bitcoin. At this Bitcoin price, the total market value of Bitcoin would match the entire debt burden of the U.S. government.

This means that the price of Bitcoin needs to pump from the current approximately $108,000 to $1.9 million, an increase of about 17.6 times. While this figure may seem astonishing, it is based on an important assumption: the U.S. government owns all circulating Bitcoins. However, when you consider reality, this equation falls apart.

Three Main Assumptions of Theoretical Calculation:

Total Supply Available: Assuming all 19,930,000 BTC can be used to repay debts.

Zero Transaction Costs: Ignoring the impact of large-scale clearing on the market

Instant Liquidity: Assuming Bitcoin can be instantly converted to USD.

These assumptions do not hold in the real world. The U.S. government does not own 19.93 million Bitcoins; it only owns a small portion of that. According to Bitcoin treasury data, the U.S. currently holds about 326,373 BTC, which accounts for approximately 1.6% of the total BTC circulating supply, and these BTC were primarily obtained through seizures in criminal investigations, including the takedown of Silk Road and other illegal platforms.

Reality Check Calculation: Bitcoin price needs to reach 116.5 million USD

If Washington attempts to use this money solely to pay off debt, the price of Bitcoin will increase significantly. Dividing 38 trillion dollars by 326,373 Bitcoins results in a value of 116.5 million dollars per Bitcoin. This is about 1,000 times higher than the current market price (close to 108,000 dollars). Based on this valuation, the total market capitalization of Bitcoin would soar to about 230 trillion dollars, which is more than twice the world's GDP.

The absurdity of this figure is evident. A market value of $230 trillion means that Bitcoin would surpass the total of all global stocks, bonds, and real estate. The current global stock market is valued at about $100 trillion, the bond market at about $130 trillion, and the real estate market at about $280 trillion. Even if Bitcoin becomes the only value storage tool in the world, this valuation would still be difficult to achieve.

At the same time, even if the price of Bitcoin reaches these heights in some way, the mechanism will collapse before the debt disappears. According to data from CoinMarketCap, the daily trading volume of Bitcoin is approximately 60 to 70 billion USD. This is only a small fraction of the 7.5 trillion USD liquidity in the global bond or foreign exchange markets. Therefore, attempting to liquidate even a small portion of the supply to “repay” government debt would immediately lead to a decrease in demand and disrupt price depth.

Additionally, the amount of Bitcoin available for trading is less than most people imagine. A report from Chainalysis shows that about 20% of mined coins (equivalent to nearly 4 million BTC) are permanently lost due to forgotten keys or destroyed wallets. This means the effective circulating supply of Bitcoin is close to 16 million. If adjustments are made, the so-called “debt parity” figure would rise significantly to over 2 million dollars.

The Profound Truth Behind the Numbers

Although Bitcoin cannot truly eliminate the United States' debt, it reveals a deeper truth about modern finance. It indicates that the government's speed of creating debt is faster than the market's ability to provide reliable collateral. Each new loan expands the gap between the value that currency represents and the value it measures.

This asymmetry explains why Bitcoin continues to resonate in policy debates and portfolio strategies. Its design, capped at 21 million BTC, forms a silent contrast to the financial systems built on a foundation of perpetual expansion. Scarcity, once seen as a relic of the golden age, has now become the most valuable commodity in currency.

Every time the U.S. debt increases by a trillion dollars, it strengthens the argument that Bitcoin has a limited supply rather than unlimited credit. This also helps explain why institutional investor interest is deepening through spot ETFs, corporate treasuries, and even speculative discussions about sovereign reserves. For investors, Bitcoin has evolved from a curiosity into a macro hedge tool to guard against a world where the denominator (the dollar itself) is no longer fixed.

The idea that Bitcoin prices could eliminate U.S. debt exposes the appeal of the currency amid fiscal uncertainty and government liabilities. The Trump administration's strategic Bitcoin reserve plan, while not truly solving the debt problem, symbolizes the government's recognition of alternative assets. This policy shift in itself raises questions about the sustainability of the fiat currency system.

Three Major Barriers of Bitcoin as a Debt Solution:

Supply Limit: The United States only holds 326,000 BTC, which is far from enough to cover the 38 trillion dollars in debt.

Liquidity Crisis: Large-scale sell-offs will destroy market depth, causing Bitcoin prices to plummet rather than rise.

Market Value Paradox: The required market value of $230 trillion exceeds global GDP, making it fundamentally unfeasible.