U.S Hopes to Pay its National Debt With Proceeds From Bitcoin

U.S Hopes to Pay its National Debt With Proceeds From Bitcoin
<a href="https://pixabay.com/users/EivindPedersen/">EivindPedersen</a> / Pixabay

The gravity-defying run of bitcoin has long caught the attention of retail and institutional investors. However, it appears that the one institution which the digital currency threatens its existence is beginning to see the positives of its adoption into the mainstream financial system.

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Paying National Debt With Bitcoin

The Federal Reserve Chairman, Jerome Powell, and Treasury Secretary, Steve Mnuchin, have announced plans by the American Government to pay off its national debt using bitcoin. In a statement made available to journalists, the Fed Reserve Chair stated that Bitcoin’s astronomic pace has caught the nation’s central banks’ attention and offers a huge opportunity to reduce the nation’s rising deficit.

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Powell, who guided the economy through a tumultuous 2020, says the asset’s bullish run, plus growing attention from institutional investors, make bitcoin a necessary hedge against the nation’s growing debt.

Treasury Secretary, Steve Mnuchin, said he is in talks with Congress to approve the sum of $10bn, which would be used to purchase the cryptocurrency in hopes of future appreciation. It would be recalled that the United States Congress had to vote to avoid a shutdown had last month.

Raising The Debt Ceiling

In the last decade, Congress has raised the debt ceiling six times, four of which occurred between 2008 and 2009. The U.S. Congress has suspended the debt ceiling until after the 2020 presidential election to prevent a repeat of the 2011 and 2013 debt crises during an election year. As a result, the U.S. debt has spiked to $27trn.

Both the Treasury Secretary and Fed Reserve Chairman believe that with bitcoin prices only going up, it presents a rare opportunity for the United States to pay off its national debt in one swell swoop.

Article by Chika Nwakanma

This satire article first appeared on The Stonk Market

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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver

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