Think Tank United Creation: Bitcoin reserves cannot solve the U.S. debt crisis, but can alleviate tensions in the bond market

Avik Roy, the chairman of the non-profit think tank Foundation for Research on Equal Opportunity, stated at the 2024 North American Blockchain Summit held in Dallas, Texas that U.S. Senator Cynthia Lummis plans to establish a strategic Bitcoin reserve. However, this is not enough to solve the country's debt crisis which has ballooned to $35 trillion.

Roy said: "When Wyoming Senator Cynthia Lummis talks about how Bitcoin reserves can help us eliminate federal debt, it's an over-hype of Bitcoin's function."

He indicated that while purchasing a large amount of appreciating Bitcoins might be helpful for America, it cannot make up for nearly exponential growth in debt since the 1980s - now standing at $35.46 trillion. "Bitcoin reserves are good but they can't solve the problem; you still have to really carry out budget reforms in order to get rid of our annual federal deficit of $2 trillion."

However he explained that such a move could alleviate tension in bond markets as "we would at least have ability to back enough dollars with Bitcoin so that bond markets feel like America won't go bankrupt." But Roy worries this arrangement may lead America into eroding these bitcoin reserves just like gold was eroded during the 1970s (Cointelegraph).