Elon Musk Warns 'De Facto' US Bankruptcy Will Happen Without a 'Fix' as Trump Is Pitched a 'Capital Markets Renaissance Fueled' by Bitcoin

Tesla billionaire Elon Musk, who has been waging a campaign against spiraling U.S. debt, has again warned of looming U.S. bankruptcy as a Federal Reserve "nightmare" could be coming true.

Tesla billionaire Elon Musk has again warned of looming U.S. bankruptcy as a Federal Reserve "nightmare" could be coming true without a "fix."

"We either fix this or go de facto bankrupt," Musk posted to X, quoting a post from the prediction market Kalshi's account that highlighted the U.S. "severe spending problem."

Musk's campaign against excessive U.S. spending has seen him create the Doge Department Of Government Efficiency, which he believes could strip $2 trillion from U.S. spending.

The Doge department is a nod to the shiba inu doge meme that's also linked to the dogecoin cryptocurrency, named by Elon Musk as his "favorite" cryptocurrency and accepted as payment by his Tesla car company.

However, Tesla continues to hold around 10,000 bitcoin, worth around $1 billion, on its balance sheet.

Earlier this year, Trump floated the idea he could use bitcoin to "pay off our $35 trillion."

"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 could overtake gold's $16 trillion market capitalization during an appearance at the Bitcoin 2024 conference.

Earlier this month, Trump confirmed he plans to create a U.S. bitcoin reserve.

"We're gonna do something great with crypto because we don’t want China, or anybody else … but others are embracing it, and we want to be ahead," Trump told CNBC. "Yes, I think so," Trump said in response to a question about whether the U.S. will create a bitcoin strategic reserve.

Republican senator Cynthia Lummis introduced a bill to congress earlier this year, entitled the Boosting Innovation, Technology and Competitiveness Through Optimized Investment Nationwide (BITCOIN) Act, which proposes the U.S. buy 1 million bitcoins over five years.

"As we head into 2025, it will be a historic year for digital assets as the U.S. adopts bitcoin as a national reserve currency," Tim Kravchunovsky, founder and CEO of the decentralized telecommunications network Chirp, said in emailed comments.

"I'm convinced this will happen sooner rather than later."