Bitcoin has surpassed $90,000 this week for the first time, marking yet another significant milestone for the cryptocurrency.
The surge comes amid growing discussions about using Bitcoin to address America’s escalating national debt.
Tesla, X, and SpaceX CEO Elon Musk, and vocal proponent of cryptocurrency, recently endorsed the idea of deploying digital assets to alleviate the United States’ debt burden—a sentiment echoed by President-Elect Donald Trump.
Musk, who supported Trump during his campaign, has been outspoken about America’s financial trajectory, warning that excessive government spending is propelling the nation towards a potential financial crisis.
He recently took to X (formerly Twitter) to underscore the unsustainability of the current debt level, which has ballooned to $35 trillion.
“Excess government spending is driving America into bankruptcy…. This debt growth is unsustainable,” he posted.
Trump’s bold proposal
During his campaign, Trump floated the provocative idea of using Bitcoin as a means to tackle the nation’s colossal debt.
Speaking to supporters in August, he suggested that digital assets might play a role in alleviating the financial burden, jesting about “handing a little crypto check” to creditors as a way of paying off the $35 trillion debt.
While this was perhaps said with a touch of humour, the suggestion has nonetheless sparked serious discussion about the feasibility of cryptocurrency as a strategic financial tool at the national level.
Trump’s administration has already signalled a more constructive regulatory approach toward cryptocurrency, seeing it as a potential asset rather than a threat.
This stance has energized the crypto community and sent Bitcoin’s price soaring. If Trump follows through on his intentions, his presidency could mark a turning point for digital assets in the United States, transforming them from a speculative investment into a cornerstone of the country’s economic strategy.
The ‘financial emergency’
The Tesla CEO’s endorsement of Trump’s pro-crypto agenda comes from a place of deep-seated concern about America’s financial health.
The world’s richest man has been ringing alarm bells over what he sees as unsustainable debt growth and excessive government spending. His warning of a looming “financial emergency” speaks to fears of inflationary pressures, rising interest costs, and an eventual reckoning for the US economy if these issues are left unaddressed.
In Musk’s view, Bitcoin presents a viable hedge against such risks.
Unlike fiat currency, which can be printed indefinitely, Bitcoin’s supply is fixed at 21 million coins, making it inherently resistant to inflation.
His alignment with the next US president on cryptocurrency suggests a shared interest in pioneering innovative financial strategies to face the economic challenges on the horizon.
The potential shift to viewing Bitcoin as a “strategic reserve asset,” as Trump has hinted, could fundamentally alter the crypto landscape.
Such a move would likely lead to a surge in institutional investment, potentially pushing the crypto’s price to new heights. With Musk and Trump’s endorsement, the idea of Bitcoin becoming a mainstream financial tool is, of course, gaining credibility among investors and policymakers alike.
Can Bitcoin really tackle America’s debt?
The concept of using Bitcoin to address national debt, while compelling, is not without challenges. The $35 trillion US debt far exceeds the entire market capitalization of the digital asset, which currently stands around $1.6 trillion.
Even if the US were to amass a large portion of the cryptocurrency’s supply, it would only cover a fraction of the debt.
However, proponents argue that Bitcoin’s value could rise significantly if demand from national governments and large institutions increases, potentially closing some of this gap.
To my mind, Bitcoin’s recent price surge and Trump’s supportive stance underscore the cryptocurrency’s growing legitimacy.
While the idea of using Bitcoin to address America’s national debt may seem far-fetched, the increasing interest from high-profile figures like Musk and Trump suggests that digital assets are here to stay.
Whether Bitcoin becomes a core part of the US financial strategy remains to be seen, but its role as a hedge against inflation and a store of value continues to strengthen.
Nigel Green is deVere CEO and Founder
Also published on Medium.
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