Elon Musk Backs Bitcoin as US Dollar Warning Sends Crypto Soaring

Bitcoin Hits $112,000 as U.S. Debt Fears Spark Shift Away from Dollar

  • Bitcoin reached a record high of $112,000, rising 50% since April.
  • U.S. leaders and Wall Street figures are voicing concerns about U.S. government spending and debt.
  • Elon Musk and others warn that Bitcoin could overtake the U.S. dollar as the world’s reserve currency if deficits are not reduced.
  • Morgan Stanley and JPMorgan analysts predict further declines in the U.S. dollar’s value due to ongoing fiscal policies.
  • Analysts see a shift toward Bitcoin as companies seek to protect assets amid dollar devaluation and growing government debt.

Bitcoin surged to a new all-time high in May, reaching $112,000 per coin. This marks a 50% increase from its lowest point in April. The rally follows strong interest from Wall Street and remarks from U.S. political leaders about cryptocurrency and government spending.

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The price jump comes as U.S. vice president JD Vance made significant predictions about crypto, and Elon Musk supported statements about concerns over America’s rising deficit. Brian Armstrong, chief executive of Coinbase, stated on X that, “If the electorate doesn’t hold Congress accountable to reducing the deficit, and start paying down the debt, bitcoin is going to take over as reserve currency.” Musk reposted this warning and commented, “This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination.”

Several financial analysts have also raised alarms. Morgan Stanley strategists said they expect the U.S. dollar to fall to 91 on the dollar index in the next year, losing about 9% of its value, as detailed in a note reviewed by Business Insider. JPMorgan CEO Jamie Dimon warned that escalating U.S. debt could mean a “tough time” for bond markets, telling Fox Business that, “If people decide that the U.S. dollar isn’t the place to be, you could see credit spreads gap out; that would be quite a problem.” Peter Vassallo at BNP Paribas Asset Management told MarketWatch, “It does feel like we’re entering into a more secular downturn for the dollar.”

Questions about U.S. fiscal health intensified after the Congressional Budget Office reported that recent legislation could add $3.8 trillion to the $36 trillion U.S. debt in the next decade. This would push total debt to about $40 trillion. Pandemic-era government spending and large fiscal packages have driven the deficit to new highs, raising fears of more inflation and further dollar devaluation.

Bitcoin, known for its limited supply and comparison to Gold as a store of value, has attracted companies seeking to protect assets from a weakening dollar. Nic Puckrin of The Coin Bureau explained this trend, noting, “As the U.S. dollar continues to devalue, we’re going to see this shift happening more and more as investors scramble to protect their assets.” Bitcoin has stayed above $100,000 for over 20 days, reinforcing its status among some as a “safe haven” asset.

Corporate interest in Bitcoin grew after MicroStrategy began holding large reserves, prompting other companies to consider similar moves. The ongoing debate over debt, spending, and dollar stability continues to drive both institutional and retail investors to Bitcoin, as global uncertainty persists.

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