Featured Image Credit: Samuel Corum/Stringer / NurPhoto/Contributor / Getty Images
Last week, the United States welcomed back President Donald Trump, who is set to return to the White House in January 2025, after a landslide victory over Kamala Harris and the Democrats.
Following his electoral success, Bitcoin rallied past $81,000 for the first time ever on Sunday whilst other cryptocurrency prices also continued to creep up.
Billionaire Elon Musk took the opportunity to suggest that Trump should consider using Bitcoin to tackle America’s ever-increasing debt, which Musk called 'unsustainable.'
The Tesla CEO, who actively supported Trump’s campaign, has been warning about a 'financial emergency' tied to the US’s $35 trillion debt.
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On his platform X (formerly Twitter), the SpaceX founder posted: "Excess government spending is driving America into bankruptcy...This debt growth is unsustainable."
This debt growth is unsustainable https://t.co/3hjc8t3MEQ
— Elon Musk (@elonmusk) November 10, 2024
Essentially, Musk was replying to Dan Hauser who posted a graph on X showing the steep rise in debt, originally sourced from the U.S. Department of the Treasury Fiscal Service.
US national debt has skyrocketed in recent years, overtaking the $34 trillion mark at the beginning of 2024. And it continues to climb following the aftermath of the pandemic-related spending and inflation pressures.
According to Yahoo Finance, the federal government spent $1.9 trillion more than it earned in 2024. Musk warned that these rising interest payments would eat up most of the federal budget, leaving minimal funds for other areas of spending.
But, could the country really go bankrupt?
’Well, it's actually not that simple. The U.S. going bankrupt in the traditional sense, where it can’t pay its debts, is unlikely.
America is going bankrupt btw https://t.co/fzy38tG7Rt
— Elon Musk (@elonmusk) September 10, 2024
For that to happen, Congress would have to allow the government to stop paying its debts which would have a major economic impact on the country. Otherwise, the government can keep borrowing as long as investors still want to buy U.S. bonds.
Bitcoin is now valued at $81,200, which is a 5% rise in just 24 hours.
Looking at 2024 alone, the crypto has shot up 65% from its January low of $38,505, reaching an overall gain of more than 80% this year.
Trump has been open to the idea that he could use Bitcoin to "pay off our $35 trillion—hand them a little crypto check, right?"
Vowing to make America the 'crypto capital of the planet,' the President added: "We'll hand them a little bitcoin and wipe out our $35 trillion."
Prior to the election's results, Nigel Green, chief executive of financial advisory firm deVere Group, spoke to The Independent: “Many investors anticipate that a Trump victory will clear the path for mainstream adoption and regulation that is both favourable and necessary for bitcoin’s continued growth.”
Furthermore, back in July, President Trump proposed creating a 'strategic national Bitcoin reserve' and even predicted that Bitcoin could eventually rival gold’s $16 trillion market capitalisation.
