Tesla CEO Elon Musk issues US bankruptcy warning amid calls for Bitcoin-inspired ‘reform’
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Tesla billionaire Elon Musk, Which launches a campaign against mounting American debtHe again warned of looming US bankruptcy The Fed’s “nightmare” may have come true.
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The price of Bitcoin rose after the election of the next US President, Donald Trump, and then rose after that He confirmed plans to create a strategic bitcoin reserve—It is something proposed as a way to combat rising debt and persistent inflation.
now, While Trump was touting a “capital markets renaissance fueled” by Bitcoin “to unleash trillions in wealth,” Musk warned that “literal” bankruptcy would occur in the United States without “reform.”
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Tesla CEO Elon Musk warned that the United States is teetering on the brink of bankruptcy amid these circumstances … [+]
“We either get this right or we go de facto bankrupt,” Musk said. to publish To [with] The current national debt is now $36 trillion and growing” and suggests a “potential solution” in the form of Musk’s Doge Department of Government Efficiency — named after the Bitcoin-inspired dogecoin.
US debt has soared in recent years, topping $34 trillion at the start of 2024, with coronavirus stimulus measures and lockdowns contributing to massive government spending and helping to send inflation out of control in 2022.
Inflation exceeding 10% forced the Federal Reserve to raise interest rates at a historic rate, resulting in higher debt interest payments and Which raises fears of a “death spiral.”
Musk’s campaign against excessive US spending led to the creation of the Doge Department of Government Efficiency, which Musk said he believes it could strip $2 trillion from US spending.
The Doge section is a reference to the shiba inu doge meme that is also linked to the cryptocurrency dogecoin, which Elon Musk has called his “favorite” cryptocurrency and has been accepted as payment by his Tesla car company — though Tesla continues to hold about 10,000 bitcoins About $1 billion on its balance sheet.
Earlier this year, Trump floated the idea that he could use Bitcoin “to pay off our $35 trillion-Give them a small check in crypto, 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 would do just that Gold’s $16 trillion market cap trumps during an appearance at the Bitcoin 2024 conference.
Earlier this month, Trump He confirmed that he plans to create a US Bitcoin reserve.
“We’re going to do something great in crypto because we don’t want China or anyone else…but others embracing it, and we want to be ahead of the curve,” Trump said. He said CNBC. “Yes, I think so,” Trump said in response to a question about whether the United States would create a strategic reserve of Bitcoin similar to its oil reserve.
Republican Senator Cynthia Lummis introduced a bill to Congress earlier this year, titled the Enhancing Innovation, Technology, and Competitiveness Through Optimal Investment Nationwide (BITCOIN) Act, which proposes that the United States purchase 1 million bitcoins over five years to reduce the national debt. America’s rising $35 trillion. .
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The price of Bitcoin has skyrocketed this year, fueled by speculation that Donald Trump might do so … [+]
“As we head into 2025, it will be a historic year for digital assets as the United States adopts bitcoin as a national reserve currency,” Tim Kravchonovsky, founder and CEO of decentralized communications network Chirp, said in email comments.
“Despite the ongoing uncertainty around this, I am convinced that this will happen sooner rather than later – likely within a few months of President-elect Donald Trump’s inauguration.”
However, some Bitcoin price and cryptocurrency market watchers have warned that the price of Bitcoin could collapse again if Trump fails to implement his promised Bitcoin plans.
“The buildup of expectations around Trump has sent prices higher — however, investors will be closely watching the move in the first 100 days of Trump’s presidency,” said Ed Hendy, chief investment officer at Tyr Capital, a Swiss-based cryptocurrency hedge fund. Via email. “If Trump’s actions do not match his rhetoric, many weak hands will fall.”
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