Tesla billionaire Elon Musk, after becoming a close advisor to U.S. president-elect Donald Trump, has recently embarked on a campaign against government over spendingâproposing a dogecoin-inspired "fix".
Musk, who quietly confirmed a crypto market game-changer last week, has backed some of the biggest Wall Street bitcoin and crypto bulls as his preferred candidates for Trumpâs cabinet.
Now, as traders bet the incoming Trump administration could open the crypto floodgates, Musk's latest salvo against the spiraling $36 trillion debt pile have sparked calls for Musk's Doge department of government efficiency to back the Bitcoin Act of 2024.
"America is headed for de facto bankruptcy very fast," Musk posted to X, quoting a finance account that warned: "The U.S. government is on pace to spend about $1.4 trillion for interest payments on the $36 trillion in debt during 2025. That will be about 28% of all government revenue going to interest payments."
The U.S. debt has soared over recent years, topping $34 trillion at the beginning of 2024, with Covid and lockdown stimulus measures contributing to massive government spending and helping to send inflation spiraling out of control in 2022.
Inflation of over 10% forced the Federal Reserve to hike interest rates at a historical clip, pushing up debt interest payments and fueling fears of a "death spiral."
Musk's campaign against excessive U.S. spending resulted in the creation of the Doge department of government efficiency, which Musk has said he believes could strip $2 trillion from U.S. spending.
The Doge department is a nod to the shiba inu doge meme that's also linked to the dogecoin cryptocurrency, named by Elon Musk as his "favorite" cryptocurrency and accepted as payment by his Tesla car companyâthough Tesla continues to hold around 10,000 bitcoin worth around $800 million on its balance sheet.
Musk's U.S. "bankruptcy" warning was quoted by senator Cynthia Lummis, a bitcoin and crypto advocate, who replied: "Enter the Bitcoin Act," a reference to a bill she introduced to Congress in July this year that would create a U.S. strategic bitcoin reserve if passed by lawmakers.
The bill, entitled Boosting Innovation, Technology and Competitiveness Through Optimized Investment Nationwide (BITCOIN) Act, proposes the U.S. buy 1 million bitcoins over five years to reduce the U.S. national debt.
"Bitcoin fixes this," the Kraken bitcoin and crypto exchange account meanwhile replied to Musk.
Earlier this year, Trump floated the idea he could use bitcoin to "pay off our $35 trillionâhand them a little crypto check, right? We'll hand them a little bitcoin and wipe out our $35 trillion," he said.
In July, Trump promised to create a "strategic national bitcoin reserve" and predicted bitcoin could eclipse gold's $16 trillion market capitalization during an appearance at the Bitcoin 2024 conference.
"The possibility of a bitcoin strategic reserve is intriguing to us because the market is likely under pricing the magnitude of the move that could result in the first half of 2025 should this become a reality," Benoit Bosc, a former portfolio manager at Millennium who launched a crypto advisory business last month, said in emailed comments.
