Elon Musk Forms America Party Amid U.S. Debt Crisis Bitcoin Surge

Tesla CEO Elon Musk has announced the formation of his own political party, the "America Party," while hinting at continued support for bitcoin. This move comes after a falling out with former U.S. President Donald Trump over the raising of the U.S. debt ceiling, which Musk had previously warned about.

Musk's concerns about the spiraling $37 trillion U.S. debt pile were a significant part of his campaign to support Trump's return to the White House. However, the recent passage of Trump's "one, big, beautiful bill," which aims to overhaul the U.S. tax-and-spend landscape and add an expected $3 trillion of debt while raising the debt ceiling by $5 trillion, has led to a rift between the two.

Financial commentator Lyn Alden, founder of Lyn Alden Investment Strategy, described the U.S. deficit as an unstoppable force, referencing the TV show Breaking Bad. She noted that the deficit added almost $2 trillion to the U.S. debt pile in 2024. Musk has criticized Trump for increasing the deficit from an already high $2 trillion under Biden to $2.5 trillion, stating that this will bankrupt the country.

Musk believes that Trump and other Republican 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 grown among investors, with David Friedberg, host of the All In Podcast, declaring a fiscal emergency in the country.

U.S. debt has surged in recent years due to massive government spending during the Covid-era and lockdowns, with rapidly hiked interest rates adding to the cost of servicing the ballooning debt. The bitcoin price has risen alongside the soaring U.S. debt pile, with Musk going to war with what he believes is out-of-control government spending.

Analysts predict a bitcoin price boom due to the U.S.'s massive fiscal expansion. James Toledano, chief operating officer at Unity Wallet, noted that the "big beautiful bill's" massive fiscal expansion may weaken the dollar and stoke inflation, potentially boosting bitcoin's 'digital gold' appeal. Lark Davis, a bitcoin and crypto investor, wrote that bitcoin has historically delivered double-digit gains in the weeks after big spending bills, and if the price action were to repeat, it would send the price to $150,000.

Musk's formation of the America Party and his continued support for bitcoin come at a time when the U.S. debt crisis is looming large. His warnings about the debt pile and his criticism of Trump's spending policies have resonated with investors who are concerned about the fiscal sustainability of the country. As the bitcoin price continues to rise, Musk's influence on the crypto market remains significant, and his new political party could have far-reaching implications for the future of U.S. politics and economics.