Tesla CEO Elon Musk expressed alarm over the rapidly climbing U.S. national debt, calling the debt clock "terrifying" in a recent post on X, as the Trump administration explores plans for a national bitcoin reserve.
Musk's comments came in response to Senator Mike Lee's concerns about the U.S. debt reaching $36 trillion. The debt has grown dramatically in recent years, jumping from $34 trillion in early 2024 to over $35 trillion just a year later, partly due to COVID-era stimulus spending.
The Trump administration is actively studying the possibility of establishing a national bitcoin reserve, similar to existing gold and oil reserves. David Sacks, Trump's cryptocurrency advisor, confirmed that an inter-agency working group is examining the feasibility of such a reserve.
During the Bitcoin 2024 conference, Trump suggested the potential use of bitcoin to address the national debt, stating, "Maybe we'll pay off our $35 trillion; hand them a little crypto check, right? Hand them a little bitcoin, and wipe out our $35 trillion."
The bitcoin price has seen substantial gains amid these developments, crossing the $100,000 mark. The surge comes as traders anticipate that mounting U.S. debt could create market conditions favorable to cryptocurrency growth.
The administration's cryptocurrency initiatives include the newly established Doge department of government efficiency, led by Musk. This department, named after the popular cryptocurrency dogecoin, has reportedly generated $100 billion in savings.
Dogecoin, which Musk has previously named his favorite cryptocurrency and is accepted as payment at Tesla, has also experienced price increases following Trump's election victory, with market observers attributing the rise to Musk's close relationship with the president.
The mounting national debt has raised concerns about potential economic consequences, particularly after inflation topped 10% in 2022, prompting the Federal Reserve to implement aggressive interest rate hikes that increased debt servicing costs.