Asset manager VanEck has stated that a Strategic Bitcoin Reserve could help mitigate the US’ growing debt, which currently stands at $36 trillion.

To explore the potential effects of this idea, the firm has developed an interactive tool inspired by the BITCOIN Act.

How Will a Strategic Bitcoin Reserve Reduce US Debt?

The BITCOIN Act, introduced by Senator Cynthia Lummis, outlines a plan for the US government to acquire up to 1 million Bitcoins (BTC) over five years, purchasing no more than 200,000 BTC per year.

These assets would be held in a dedicated reserve for at least 20 years. Lummis believes such a reserve could substantially reduce the nation’s debt.

Notably, VanEck’s new calculator lets users know the impact of such a reserve. The tool allows the simulation of a variety of hypothetical scenarios by adjusting different variables. 

These include the debt and BTC’s growth rates, the average purchase price of Bitcoin, and the total quantity of Bitcoin held in reserve. Meanwhile, VanEck has also included their own “optimistic projection.”

“If the US government follows the BITCOIN Act’s proposed path – accumulating 1 million BTC by 2029 – our analysis suggests this reserve could offset around $21 trillion of national debt by 2049. That would amount to 18% of total US debt at that time,” VanEck noted.

The analysis is based on assumptions regarding the future growth rates of both US debt and Bitcoin. VanEck has supposed a 5% annual growth rate for the national debt. This would see it rise from $36 trillion in 2025 to around $116 trillion by 2049. 

Similarly, Bitcoin is presumed to appreciate at a compounded rate of 25% per year. Its acquisition price is predicted to start at $100,000 per Bitcoin in 2025. Thus, by 2049, the price could potentially be $21 million per Bitcoin.

While the federal government considers the potential of a Strategic Bitcoin Reserve, interest is also rising at the state level. At least 20 US states have introduced bills to create digital asset reserves. 

According to Matthew Sigel, Head of Digital Assets Research at VanEck, state-level bills could collectively drive as much as $23 billion in Bitcoin purchases. 

President Trump’s Crypto Promise

VanEck’s move comes as Bitcoin is receiving increasing political support. US President Donald Trump has reiterated his commitment to positioning the US as a global leader in cryptocurrency. 

Speaking at the Future Investment Initiative Institute summit in Miami, Trump emphasized the economic growth driven by crypto-friendly policies.

“Bitcoin has set multiple all-time record highs because everyone knows that I’m committed to making America the crypto capital,” Trump said.

Since returning to office, Trump has signed an executive order to establish a national “digital asset stockpile.” He has also nominated pro-crypto leaders to head major regulatory bodies. However, whether a Bitcoin reserve will actually be established remains to be seen.

Today, approximately $2.04 billion worth of Bitcoin (BTC) and Ethereum (ETH) options are set to expire, creating significant anticipation in the crypto market.

Expiring crypto options often leads to notable price volatility. Therefore, traders and investors closely monitor the developments of today’s expiration.

Options Expiry: $2.04 Billion BTC and ETH Contracts Expire

Today’s expiring Bitcoin options have a notional value of $1.62 billion. These 16,561 expiring contracts have a put-to-call ratio of 0.76 and a maximum pain point of $98,000.

On the other hand, Ethereum has 153,608 contracts with a notional value of $421.97 million. These expiring contracts have a put-to-call ratio of 0.48 and a max pain point of $2,700.

At the time of writing, Bitcoin trades at $98,215, a 1.12% increase since Friday’s session opened. Ethereum trades at $2,746, marking a 0.20% decrease. In the context of options trading, the put-to-call ratio below 1 for BTC and ETH suggests a prevalence of purchase options (calls) over sales options (puts).

However, according to the max pain theory, Bitcoin and Ethereum prices could gravitate toward their respective strike prices as the expiration time nears. Doing so would cause most of the options to expire worthless and thus inflict “max pain”. This means that BTC and ETH prices could register a minor correction as the options near expiration at 8:00 AM UTC on Deribit.

It explains why analysts at Greeks.live noted a cautiously bearish sentiment in the market, with low volatility frustrating traders. They suggest ongoing concern among traders and investors, particularly around Bitcoin, with traders closely monitoring key price points.

“The group sentiment is cautiously bearish with low volatility frustrating traders. Participants are watching $96,500 level with skepticism about upward momentum, while discussing possibilities of volatility clustering at low levels around 40%,” the analysts wrote.

Elsewhere, Deribit warns that while low volatility feels safe, this sense of safety is only momentary, as markets tend not to wait long.

Bitcoin Price Outlook: Key Levels and Market Outlook

Bitcoin trades around $98,243, hovering above a critical demand zone between $93,700 and $91,000. This area has previously acted as strong support, indicating buyers may step in to defend these levels.

On the other hand, a key supply zone is positioned at around $103,991, where selling pressure has historically been significant. BTC has struggled to break past this level, making it a major resistance to watch.

From a price action perspective, BTC has been forming lower highs and lower lows, suggesting a short-term bearish trend. However, the recent price movement hints at a possible reversal, as BTC is attempting to bounce off its demand zone.

The volume profile also shows significant trading activity near $103,991, reinforcing the resistance level. Meanwhile, a noticeable low volume area near $91,000 suggests that if BTC breaks below this level, a sharp drop could follow due to the lack of strong support.

Meanwhile, the Relative Strength Index (RSI) is currently at 50.84, indicating neutral momentum. While BTC is not overbought or oversold, the RSI’s slight upward trend could signal growing buying interest.

If Bitcoin holds above the $93,700 support zone, it may attempt a push towards the $100,000 milestone. However, a breakdown below $91,000 could trigger a move lower, potentially testing the $88,000 to $85,000 range.

As companies face stagnation and declining revenues, some turn to an unconventional strategy to regain investor interest—buying Bitcoin (BTC).

Firms are now trying to emulate MicroStrategy (now Strategy), whose Bitcoin accumulation commitment continues to place it on the leaderboard.

Bitcoin Becomes A Quick Fix for Fading Businesses

Rather than reinvesting in their core operations, firms like Goodfood Market Corp are using Bitcoin as a financial maneuver to create buzz around their stocks.

According to Bloomberg, Goodfood CEO Jonathan Ferrari once led a promising meal-delivery startup. However, the company’s stock plummeted 98% from its pandemic-era highs. Ferrari then sought a drastic measure, investing corporate funds in Bitcoin, to reinvigorate investor interest.

“We have a nice core business, but it’s too small to be relevant to the capital markets. I think as we start investing more into our Bitcoin treasury strategy, we’ll be able to create more liquidity in our stock and attract investors,” Bloomberg reported, citing Ferrari.

According to Bloomberg, this tactic centers on the hope that these firms will replicate the success of Michael Saylor’s Strategy. Meanwhile, Goodfood is not alone; dozens of public companies are following in Saylor’s footsteps with their Bitcoin strategies.

The report cites firms in social media, video gaming, and even coal mining that divert corporate cash to invest in Bitcoin. Further, some firms, like Semler Scientific, borrowed funds to invest in the pioneer crypto.

Recently, BeInCrypto reported that GameStop is mulling a Bitcoin investment. The American video game retailer’s pivot to BTC is motivated by the need for financial stability.

“GameStop, a company with no viable business plan, has thrown another Hail Mary by announcing that it might use its cash to buy Bitcoin. The irony is that Bitcoin is even more overpriced than GME. No matter; speculators are buying the stock anyway, hoping it becomes another MSTR,” Bitcoin critic Peter Schiff wrote.

This suggests that firms beyond retail are also banking on Bitcoin’s volatile yet historically upward-trending value to boost their stock appeal. However, the speculative strategy carries significant risks, raising concerns.

As BeInCrypto reported, MicroStrategy faces a billion-dollar tax dilemma over Bitcoin gains. Specifically, the firm may owe billions under the US corporate alternative minimum tax (CAMT) for its $47 billion Bitcoin holdings. This includes $18 billion in unrealized gains.

New Financial Accounting Standards Board (FASB) rules compound the issue. Starting this year, companies must report the fair value of cryptocurrencies on their balance sheets. MicroStrategy disclosed that this change would add up to $12.8 billion to its retained earnings and potentially $4 billion to its deferred tax liabilities.

This means that companies’ Bitcoin holdings could directly affect their financial statements. Such an outcome would make them more susceptible to regulatory scrutiny and market volatility. Similarly, the IRS is set to begin tracking cryptocurrency transactions on centralized exchanges in 2025, signaling a broader regulatory crackdown.