The Bitcoin reserve established by President Donald Trump’s March 6 executive order may help the U.S. tackle deficit concerns.
That’s according to $1.5 trillion asset manager Franklin Templeton. For context, the U.S. deficit refers to government spending outpacing revenue, forcing it to take on debt through Treasury bonds and other securities. In recent years, the pace of these rising deficits has raised sustainability concerns.
According to Franklin Templeton, however, the U.S.’s Bitcoin reserve strategy could help “alleviate” these fears, suggesting a strong belief in the asset’s growth potential.
“The Federal Government’s recognition of bitcoin as a reserve asset, highlights its value and legitimacy. We see this move as supportive of the Federal Government’s long-term fiscal health, potentially helping to alleviate deficit concerns,” the firm wrote in a Monday, March 10, X post.
While Franklin Templeton conceded that Bitcoin remained a volatile asset with risks, it contended that the U.S.’s decision not to sell its roughly 200,000 BTC stash, worth about $16 billion, would likely help stabilize the market.
The firm also noted that the U.S.’s move could spur further institutional and nation-state adoption.
$16T to $81T at Stake?
Franklin Templeton is not the only one to suggest that the Bitcoin reserve could help the U.S. tackle fiscal health concerns.
The Chairman of Strategy, formerly MicroStrategy, Michael Saylor has asserted that the U.S. could clear its debt, which currently stands at $36 trillion, with a Bitcoin reserve.
He argued that this would be possible if the world power could accumulate 5% to 25% of the 21 million BTC supply in the next ten years. Anticipating that one Bitcoin would be worth at least $13 million by 2035, he believes the U.S. government’s stash could be worth between $16 trillion and $81 trillion. This is inclusive of the government’s current nearly 200,000 BTC stash.
