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Tesla chief executive Elon Musk, the former “first buddy” who was U.S. president Donald Trump’s right-hand man until recently, has announced he’s starting his own political party called the “America Party” (while dropping hints he’s still backing bitcoin).
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Musk, whose stark warnings over the spiraling $37 trillion U.S. debt pile were a big part of his campaign to get Trump back into the White House last year, has fallen out with Trump over the raising of the U.S. debt ceiling in Trump’s signature “one, big, beautiful bill.”
Now, as the bitcoin price is braced for “trillions and trillions” to hit the market, bitcoin and crypto analysts are predicting a bitcoin price boom as a result of the U.S.’s “massive fiscal expansion.”
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“Nothing stops this train,” Lyn Alden, a financial commentator and founder of Lyn Alden Investment Strategy, said during this year’s bitcoin conference in Las Vegas, a reference to TV show Breaking Bad that she used to describe the U.S. deficit that added almost $2 trillion to the U.S. debt pile in 2024.
Musk has pointed to Trump “increasing the deficit from an already insane $2 trillion under Biden to $2.5 trillion,” as why he’s decided to start the America Party, posting to X that, “This will bankrupt the country.”
Musk has said he believes president Trump as well as Republican Party politicians who won last year’s election on a spending-reduction platform have betrayed voters who want government spending to be reined in.
Fears over the U.S. debt pile have taken hold among investors on Wall Street and in Silicon Valley, with David Friedberg, a host of the influential All In Podcast that’s had both Musk and Trump on as guests, declaring: “We are in a fiscal emergency in this country and we’re not addressing it.”
U.S. debt has skyrocketed in recent years following huge government spending through the Covid-era and lockdowns, with interest rates that were rapidly hiked to rein in inflation adding to the cost of servicing the ballooning $37 trillion U.S. debt pile.
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This week, Trump’s “one, big, beautiful bill,” designed to overhaul the U.S. tax-and-spend landscape and power the country’s next phase of growth while adding an expected $3 trillion of debt and raising the debt ceiling by $5 trillion, was passed by the House of Representatives.
“The ‘big beautiful bill’s’ massive fiscal expansion may weaken the dollar and stoke inflation, potentially boosting bitcoin’s ‘digital gold’ appeal,” James Toledano, chief operating officer at Unity Wallet, said in emailed comments, pointing to recent U.S. dollar weakness and echoing Musk who said the U.S. dollar “will be worth nothing if the U.S. doesn’t do something about its national debt.”
The bill is “one big red flag for fiscal sustainability and one big green flag for risk assets, especially crypto,” according to bitcoin and crypto investor Lark Davis, who wrote in an emailed note that, “this is exactly why we buy bitcoin.”
“Bitcoin has historically delivered double-digit gains in the weeks after big spending bills,” Davis wrote. “Bitcoin jumped 38% when Trump signed a major spending bill in late 2020. If bitcoin’s price action were to repeat again, this time it would send the price to $150,000. And because nothing stops this train, it’s hard money for the win during a debt crisis.”
