10/20 update below. This post was originally published on October 18
Tesla billionaire Elon Musk, who could be about to put “dogecoin in the Treasury,” sparked bitcoin price panic this week when Tesla suddenly moved its bitcoin.
The bitcoin price, which soared toward its all-time high of around $70,000 per bitcoin in recent weeks thanks to BlackRock and China, has stalled after Tesla’s $750 million worth of bitcoin moved to new addresses following two years of dormancy, sparking speculation Tesla may have sold off its remaining bitcoin.
Now, as billionaire investor Stanley Druckenmiller issues a serious Federal Reserve warning, Elon Musk has repeated a warning that the U.S. is hurtling toward the brink of “bankruptcy.”
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“Excess government spending is driving America to bankruptcy,” Musk posted to X, the social media platform he bought and rebranded from Twitter.
Musk’s post quoted an anonymous finance account that had said “$500 billion was added to the national debt in just the last 3 weeks,” adding: “The government is out of control.”
Meanwhile, speaking during a town hall meeting in Folsom, Pennsylvania, Musk warned inflation could again spiral out of control as a result of “crazy” government spending.
“The Federal government is spending America into bankruptcy … and that’s what really leads to inflation … when the government spends more than it brings in,” Musk said, calling it a “pernicious” tax.
“We have to radically reduce the amount of government spending so we don’t rack up a government debt that’s impossible to repay and we don’t drive the country to bankruptcy,” Musk said.
10/20 update: Elon Musk has continued to warn that U.S. spending is spiraling out of control, posting to X that “this needs to stop.”
“The U.S. Treasury—your tax dollars—are being wasted at a staggering rate,” Musk posted, quoting a post by a political action committee (PAC) founded by Musk that claimed “half a trillion dollars has been added to the National Debt in the in the past three weeks.”
“Wasteful spending is out of control in this country,” the America PAC posted, adding “a Department of Government Efficiency is desperately needed.”
Musk has agreed to lead the so-called Department of Government Efficiency that has been suggested by former U.S. president and Republican candidate Donald Trump, calling it Doge—a reference to the meme that’s also the basis of the dogecoin cryptocurrency.
The dogecoin cryptocurrency, a tongue-in-cheek rival to bitcoin that’s been semi-adopted by Musk over recent years, has seen its price soar 25% this last week on the back of Musk’s Doge department comments—which caused billionaire Mark Cuban to joke that Musk could put “dogecoin in the U.S. Treasury,” if Donald Trump retakes the White House next month.
Last month, Musk met with El Salvador’s bitcoin-backing president Nayib Bukele, who made history when he adopted bitcoin as legal tender in El Salvador in 2021, with Bukele predicting the U.S.’s days could be numbered.
U.S. national debt has skyrocketed in recent years, crossing the $34 trillion mark at the beginning of 2024, largely due to Covid and lockdown stimulus measures that sent inflation spiraling out of control and forced the Federal Reserve to hike interest rates at a historical clip.
Earlier this year, Bank of America analysts warned the U.S. debt load is about to ramp up to add $1 trillion every 100 days—potentially fueling a bitcoin price surge—and could reach $36 trillion by the end of 2024.
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Earlier this month, JPMorgan analysts predicted a so-called “debasement trade” could fuel a bitcoin price boom going into the U.S. election.
Gold and bitcoin could be boosted by “persistently high government deficits across major economies, to waning confidence in fiat currencies in certain emerging markets, and to a broader diversification away from the dollar,” according to the analysts who said a Trump election win would likely reinforce the debasement trade.
“Rising geopolitical tensions and the coming U.S. election are likely to reinforce what some investors call the ‘debasement trade’ thus favoring both gold and bitcoin,” JPMorgan analysts led by Nikolaos Panigirtzoglou wrote in a note to clients seen by Marketwatch.
Read More: ‘This Needs To Stop’—Tesla Billionaire Elon Musk Issues ‘Staggering’ Fed ‘Bankruptcy’