Elon Musk has once again turned to social media to criticize the Trump administration’s handling of the national debt. The Tesla founder has particularly called out the recently signed One Big Beautiful Bill Act as crucial in further amplifying an already alarming deficit.
Since traditional methods are proving ineffective, experts from Bitwise and Sentora suggest that alternatives like Bitcoin deserve consideration for reducing interest rates and curbing excessive spending.
Musk’s Debt Outcry: From DOGE to America Party
A lot has happened with Elon Musk over the past few days. The former head of the Department of Government Efficiency (DOGE), the pseudo-federal agency responsible for reducing government overspending, kicked off July by going on X to rant about the nation’s spending habits.
Musk’s most recent posts build on previous ones in which he explicitly called out President Trump’s One Big Beautiful Bill, which was signed into law this week. He also said the bill would increase the debt ceiling by five trillion dollars.
Amid an ongoing exchange of affronts between Elon Musk and Trump over the subject, the Tesla founder decided to form his own political space: the America Party.
Musk stated that the party’s goal is to “give you back your freedom” and address what he views as a “one-party system” regarding wasteful spending and graft. His poll on X showed significant support for a new political party.
What’s certain, however, is that beyond the political spectacle, the discussion around the United States’ national fiscal health is constantly being refloated for its urgency.
The Looming “Debt Bomb” and Market Warnings
The United States faces a serious, ongoing fiscal problem that’s reaching alarming proportions. Instead of controlling the growing deficit, lawmakers keep raising the ceiling, which Musk calls “a debt bomb ticking.”
Though policymakers have done little to counter this chronic issue, the market is increasingly speaking out against it.
“Debt is climbing fast, interest payments are now the government’s largest single line item, and, worst of all, there’s no credible plan to rein it in... and, as interest payments continue to snowball, the notion that ‘something’s got to give’ is gaining traction,” Danny Nelson, research analyst at Bitwise, told BeInCrypto.
If the current situation continues, experts forecast surging inflation and a further decline in the dollar’s value. Even though there are clear, established ways to fix this, no one seems willing to use them.
Political Aversion to Debt Solutions
Traditional methods for addressing rising debt, such as spending cuts and tax increases, are highly unpopular. As a result, politicians across the political spectrum are reluctant to implement them.
“History shows there are only a few brutal ways out of a debt spiral—and war tops the list. Short of that, Washington could slash spending on big-ticket items like infrastructure, Social Security, and defense, or it could impose steep tax hikes. Both fixes are political poison, especially in a democracy where voters recoil at benefit cuts and higher taxes,” Patrick Heusser, Head of Lending and TradFi at Sentora, explained.
Continuing with a now well-established tradition, lawmakers have opted for the back-door option: brushing the matter under the carpet for the future leaders of the United States to deal with.
“With no painless option on the table, we keep doing what we do best: kick the can down the road and pass the bill to the next generation,” Heusser added.
As this problem continues to snowball in steep decline, investors are sounding every available alarm. Bitcoin is frequently highlighted within crypto circles as a potential solution to contain the issue, particularly since traditional methods are failing.
Bitcoin: A New Hope in the Debt Debate?
Since traditional methods seem futile in containing the United States’ deepening deficit, Bitcoin has surfaced as a plausible solution.
Given its unofficial status as “digital gold” and its consistent long-term appreciation, Bitcoin is gaining legitimacy as a potential, albeit partial, solution within a broader strategy to manage the escalating national debt.
“Since the end of the gold standard, central banks have routinely added gold to their reserves as insurance against sharp fiat-currency depreciation. Extending that playbook to Bitcoin is a logical next step—and early movers would lock in the most protection, because today’s Bitcoin price still doesn’t fully reflect the chance that sovereign reserves will one day treat it the way they already treat gold,” Heusser told BeInCrypto.
Various ideas have emerged regarding how to leverage Bitcoin effectively for this purpose. Some staunch advocates have proposed Bitcoin-enhanced treasury bonds as an innovative way to lower interest rates, while others suggest directly integrating the digital asset into national reserves.
While experts agree that exploring such an alternative is worthwhile, they caution that thorough due diligence is essential.
Weighing the Risks and Rewards
Knowing the optimal time to implement a Bitcoin-based strategy to address the national debt problem is crucial for maximizing benefits.
While Nelson believes Bitcoin is an option worth considering, he emphasizes that its price swings must be carefully weighed.
“Bitcoin’s volatility makes it an imperfect device for addressing a nation’s debt. Any investment in BTC large enough to make a real difference comes with sizable risks. What if the price moves against the country in the short term? Such a situation could easily spook buyers of that country’s debt, prompting them to demand higher interest payments– and perhaps sending ripples through the broader economy,” he said.
History has already proven that Bitcoin’s value rises over time. Waiting to take such a drastic move may not be such a bad idea.
“All that said, as bitcoin matures its volatility continues to fall. That makes it more appealing to nation-states and institutions,” Nelson added.
Besides, if the United States were to make such a move, it would immediately unleash a chain reaction.
The Unconventional Road Ahead
The United States, as the world’s largest economy and most crucial financial market, inevitably impacts every corner of the globe through the actions it does –and doesn’t– take.
Should it decide to purchase Bitcoin to manage its debt, other countries would likely adopt a similar approach. However, if this plan were to negatively impact the US’s economic outlook at any stage, the repercussions would also be felt worldwide.
Nelson believes this is all the more reason why such a move shouldn’t be taken lightly.
“If one major country does take a serious swing at Bitcoin as a solution to global debt concerns –and we believe that is a possibility– that could be the tipping point. While we’re not there yet, more investors are turning to Bitcoin as a potential hedge and solution to runaway fiat currencies,” he concluded.
Such a problem has no easy answers, and the United States’ chosen path will set a global precedent. As traditional methods prove insufficient, the debate has shifted from acknowledging the problem to identifying the right solution. Bitcoin consistently emerges as part of that conversation.
