Billionaire Elon Musk broke his long silence on Bitcoin, saying he believes it "has some value" and suggesting other cryptocurrencies are also doing well. He noted that the dollar is heading for "destruction" and that a rising $35 trillion debt could make the United States "bankrupt."
Musk, CEO of Tesla, has mostly avoided commenting on Bitcoin and cryptocurrencies following the 2022 Bitcoin price crash, Forbes reported. However, with Wall Street adoption and a shift in the stance of Republican presidential candidate Donald Trump, Bitcoin prices have rebounded to challenge $70,000 again.
“I do think Bitcoin has merit, and there are probably other cryptocurrencies out there that are good,” Musk said in an interview broadcast on YouTube. “I have a soft spot for Dogecoin because I like dogs and memes.”
Musk added $1.5 billion worth of Bitcoin to Tesla's balance sheet in 2021, sending Bitcoin prices soaring and driving Dogecoin and the broader cryptocurrency market.
However, he subsequently first withdrew Tesla's plan to accept Bitcoin payments, and then sold most of Tesla's Bitcoin in order to barely achieve a profitable quarter in 2022, which caused the price of Bitcoin to plummet.
Tesla still holds nearly 10,000 bitcoins on its balance sheet, worth nearly $650 million.
Meanwhile, Musk has been hinting at a series of upgrades coming to his Twitter, now called X, platform that some bitcoin and cryptocurrency traders believe could be market-changing.
Musk posted an image on Twitter in March linking Twitter to his former payments company (now PayPal), saying "the cycle will be complete."
According to US media reports earlier in July, Musk warned that the US dollar is heading for "destruction" and that the rising $35 trillion debt could make the United States "bankrupt", which some analysts believe could push up Bitcoin prices.
"You might ask, how bad has the dollar gotten?" Musk tweeted, along with an image suggesting the U.S. is on the brink of hyperinflation.
“By the way, the United States is going bankrupt,” Musk added in a reply to the Dogecoin co-founder, who highlighted the soaring interest costs on U.S. debt.
Interest payments on U.S. debt are expected to reach $870 billion this year, according to a recent analysis by the Congressional Budget Office, as runaway inflation forces the Federal Reserve to raise interest rates at an unprecedented pace following massive spending and money printing during the coronavirus pandemic.
Bitcoin prices surged after Bank of America analysts warned that the U.S. debt burden will increase by $1 trillion every 100 days.
“With the U.S. national debt increasing by $1 trillion every 100 days, it’s no surprise that ‘debt-for-money’ trades like gold and bitcoin are near all-time highs,” Michael Hartnett, chief strategist at Bank of America, wrote in a note to clients.
Hartnett predicts that the newly created Bitcoin spot ETFs that have taken Wall Street by storm in the past few months will have a "blowout year," driven in part by the slumping U.S. dollar.
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