Tesla CEO Elon Musk has sparked fresh speculation and concern in the cryptocurrency market after Tesla moved $750 million worth of bitcoin, which had been dormant for two years. This has fueled rumors that Tesla may be offloading its remaining bitcoin holdings, causing the cryptocurrency’s price to stall just below its all-time high of $70,000.
Tesla’s move comes amid growing concerns over the U.S. economy, with Musk issuing warnings about excessive government spending and its potential to drive America into bankruptcy. Musk recently posted on X, formerly known as Twitter, stating, “Excess government spending is driving America to bankruptcy,” and criticizing the federal government for adding $500 billion to the national debt in just three weeks. He emphasized that unchecked government spending is a major driver of inflation and could further destabilize the economy.
At a recent town hall meeting in Folsom, Pennsylvania, Musk elaborated on his concerns, stating, “The Federal government is spending America into bankruptcy… that’s what really leads to inflation.” Musk urged for a drastic reduction in government spending to avoid pushing the country into an irreparable debt crisis.
In light of these economic worries, Musk’s discussions with El Salvador’s President Nayib Bukele, who made bitcoin legal tender in 2021, have also raised questions about the future of the U.S. economy. Bukele warned that the U.S. might be heading toward a grim financial outlook.
The U.S. national debt recently crossed $34 trillion, primarily due to stimulus measures following the COVID-19 pandemic, which accelerated inflation and led the Federal Reserve to aggressively hike interest rates. Financial analysts from JPMorgan and Bank of America have warned that the country’s debt could surge by $1 trillion every 100 days, possibly reaching $36 trillion by the end of 2024.
These economic challenges have led some investors to predict that bitcoin and gold could see significant gains. JPMorgan analysts suggested that rising geopolitical tensions and concerns over currency debasement could drive a price boom for both bitcoin and gold, especially in the run-up to the U.S. presidential election.
As the financial outlook grows uncertain, Musk’s remarks and Tesla’s bitcoin movement are drawing attention to the potential risks and opportunities in the volatile crypto market.
