Tesla billionaire Elon Musk declares a “financial emergency” as a $35.7 trillion “debt bomb” triggers a Bitcoin price boom to rival gold

Tesla billionaire Elon Musk, who surprised traders this week with a shocking Bitcoin endorsement, has repeatedly warned in recent weeks that the US is on the brink of “bankruptcy.”

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Bitcoin prices have soared this year as fears over a ballooning $35.7 trillion debt pile push gold prices to all-time highs – and the Federal Reserve is caught in a “nightmare” scenario .

Now Musk, who is working overtime to bring “crypto president” Donald Trump back to the White House, has called the US government’s $1 trillion annual interest payments a “financial emergency” as inflation fears become another legendary one Pushing Investor to Buy Bitcoin Gold.

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“Interest payments on the debt alone represent 23% of all federal tax revenue,” Musk said during a Trump campaign rally, later calling the situation a “financial emergency” on X. “Interest payments now exceed the Defense Department budget, which is one.” Trillion dollars per year. That's a lot of money.

Bitcoin price has returned just below its all-time high of $70,000 per bitcoin this year and has soared along with gold prices as investors bet that higher interest rates combined with a huge rise in deficits will create a feedback loop that forcing governments to print more money.

Tesla continues to hold around 10,000 bitcoins – sometimes called digital gold – worth nearly $800 million on its balance sheet, sparking fears last week that the company could face a payout when it suddenly moved its bitcoins to new wallets postponed.

The U.S. national debt has soared in recent years, surpassing $34 trillion in early 2024, largely due to Covid-19 and lockdown stimulus measures that sent inflation spiraling out of control and the Federal Reserve forced interest rates to rise to historic levels.

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Earlier this year, analysts at Bank of America warned that the US debt burden would rise by $1 trillion every 100 days – potentially leading to a rise in the price of Bitcoin – and could reach $36 trillion by the end of 2024 .

This week, legendary billionaire investor Paul Tudor Jones warned: “All roads lead to inflation.” CNBC that he is therefore “Long Gold” and “Long Bitcoin”.

“Under Trump, the deficit is rising by $500 billion a year; under (Vice President Kamala) Harris' plan, it increases by another $600 billion a year. I feel like this is all just a fantasy,” said Tudor Jones, who earlier this year warned of a “debt bomb” in the US due to “fiscal recklessness”.

In 2020, Tudor Jones helped jump-start the Covid-era Bitcoin and crypto bull market when he came out as one of the first Bitcoin supporters on Wall Street, calling it “the fastest horse to fight the “Inflation”.