Tesla Billionaire Elon Musk Declares 'Financial Emergency' As $35.7 Trillion 'Debt Bomb' Raises A Bitcoin Price To Rival Gold

Tesla billionaire Elon Musk, who surprised traders this week by endorsing bitcoin, has repeatedly warned in recent weeks that the United States is teetering on the brink of “bankruptcy.”

Unlock over $3,000 in benefits including premium networking, priority access to global events, unparalleled access to a community of top Web3 entrepreneurs, creators and investors giving you free access Forbes.com and us Forbes CryptoAsset & Blockchain Advisory Newsletter. Apply now!

Bitcoin prices have soared this year as fears of a $35.7 trillion debt pile have pushed gold prices to all-time highs – with the Federal Reserve caught in a “nightmare” scenario.

Now, Musk, who is working overtime to return “crypto president” Donald Trump to the White House, has called the US government's $1 trillion in interest payments a year a “financial emergency,” as fears of inflation drive another legendary investor to buy bitcoin and gold.

Sign up now for free Cryptocodex–A daily five-minute newsletter for traders, investors and crypto-enthusiasts that will keep you up to date and ahead of the Bitcoin and crypto market bull run.

ForbesA 'Declaration of War'—Fed and ECB Plan to 'Tax or Ban' Bitcoin and Use Price Gains to Avoid $35.7 Trillion Doom Loopby

“Debt interest payments alone are 23% of all federal tax revenue,” Musk said during Trump's campaign, later calling the situation a “financial emergency” at X. “Interest payments now exceed the Defense Department's budget, which is $1 trillion a year.

Bitcoin prices have bounced back below their all-time high of $70,000 per bitcoin this year, with gold rising even higher, as investors bet higher interest rates combined with huge increases in deficits will create a feedback loop, forcing governments to print more money. .

Tesla holds about $800 million worth of about 10,000 bitcoins—sometimes known as digital gold—on its balance sheet, raising concerns that it could cash out when its bitcoins were suddenly moved to a new wallet last week.

The US national debt has skyrocketed in recent years, surpassing the $34 trillion mark by early 2024, largely due to Covid and lockdown stimulus measures that have spiraled out of control inflation and forced the Federal Reserve to raise interest rates at a historic clip.

Sign up now for CryptocodexA free, daily newsletter for the crypto-curious

Forbes'Digitizing the Dollar'—BlackRock CEO Reveals His Radical Plan for AI-Driven Crypto Predicted to Explode Bitcoin and Ethereum Pricesby

Earlier this year, Bank of America analysts warned that the U.S. debt burden was about to add $1 trillion every 100 days—potentially to a bitcoin price spike—and could reach $36 trillion by the end of 2024.

This week, legendary billionaire investor Paul Tudor Jones warned that “all roads lead to inflation”. CNBC As a result he is “long gold” and “long bitcoin”.

“Under Trump, the deficit rises by $500 billion per year; below [vice president Kamala] Harris projects, that adds up to an additional $600 billion per year. I have a feeling these are just pipe dreams,” said Tudor Jones, who earlier this year warned of a “debt bomb” in the US as a result of “fiscal recklessness”.

In 2020, Tudor Jones helped start the Covid-era Bitcoin and crypto bull run when he came out as one of the first Bitcoin-backers on Wall Street, calling it “the fastest horse to beat inflation”.