Elon Musk, Tesla’s billionaire founder, has publicly warned about an impending financial emergency due to the burgeoning U.S. debt of $35 trillion. This pronouncement came amidst a sharp incline of Bitcoin, outperformed by its adversary dogecoin, largely due to Musk’s endorsement of the Department Of Government Efficiency also known as Doge.
Musk has labeled the current growth in U.S. debt as unsustainable, in response to Kentucky senator Rand Paul’s similar sentiments regarding annual deficits of $2 trillion. In 2015, Paul began accepting Bitcoin for his campaign donations and suggested that cryptocurrency could replace the U.S. dollar due to decreased confidence and increased government surveillance.
The U.S. national debt crossed the 34 trillion thresholds in 2024, primarily driven by the Covid-19 pandemic and subsequent lockdown CAPEX. This crisis led to inflation spiraling out of control and forced the Federal Reserve to increase interest rates rapidly. Following his presidential election victory, Donald Trump proposed using Bitcoin to offset the $35 trillion debt.
Parallel to these concerns over the national debt, there have been significant increases in the price of Bitcoin, with its value nearing $80,000 per Bitcoin. Elon Musk’s criticism of excessive U.S. expenditure has also led to the proposal of the Doge department, aiming to carve $2 trillion from U.S. spending.
The meme-inspired dogecoin cryptocurrency, which happens to be Musk’s favourite and is accepted by Tesla, has seen a significant increase in value, doubling in the past month.