- Elon Musk warned that the government’s spending bill would bankrupt Americans and add $2.5 trillion in fiscal debt.
- Arthur Hayes, Brian Armstrong, and Robert Kiyosaki expected a BTC boom amid the U.S. fiscal crisis.
The U.S. fiscal deficit debate resurfaced after Elon Musk slammed the government’s spending bill that would add $2.5 trillion to the debt burden in the next ten years.
Musk decried that the bill would bankrupt Americans, reigniting calls for Bitcoin [BTC] as an alternative hedge. Musk went on and added,
“It will massively increase the already gigantic budget deficit to $2.5 trillion and burden America citizens with crushingly unsustainable debt.”
U.S. public debt has soared to $36.9 trillion, and analysts have been cautioning of a potential devaluation of the U.S. dollar and inflation.
In fact, Coinbase founder, Brian Armstrong, warned that the fiscal debt burden may tip BTC to become the world’s reserve currency.
“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.”
All roads lead to Bitcoin
Early in the year, BlackRock’s Larry Fink made a similar statement,
“If the U.S. doesn’t get its debt under control, if deficits keep ballooning, America risks losing that position (world reserve currency) to digital assets like Bitcoin.”
Simply put, BTC, a fixed-supply asset with only 21 million coins and a deflationary issuance rate, could be the biggest beneficiary as U.S. fiscal woes worsen.
For his part, Arthur Hayes, founder of BitMEX exchange, noted that the government will always spend more, urging users to buy BTC.
“Just buy $BTC cause we know a growing complex adaptive organism, the govt, never stops eating.”
Worth pointing out, however, that when the spending bill cleared the Senate in May, gold and BTC pumped. This underscored a risk-off sentiment and further cemented that the fiscal fall-out could boost BTC and gold.
Gold price has surged 2% this week to $3.3K, but BTC has yet to follow suit and was valued at $105K. In fact, from a YTD (year-to-date) perspective, gold recorded more ETF inflows than BTC.
It raked in $17.8B inflows in the first half of 2025, while BTC saw $7.2 billion. In short, gold outperformed BTC by more than 2.4x. But the trend could change, going by Q2 traction.
Notably, gold inflows dropped from $30 billion to $17 billion, meaning $13 billion was withdrawn from the products.
Meanwhile, BTC ETFs inflows surged from zero to $7 billion. If the trend holds, BTC could outperform gold in the mid to long term.
On the price front, BTC was up 12% on a YTD basis, while gold rallied 28%. But the assets could outperform in summer as the U.S. fiscal crisis deepens, noted Robert Kiyosaki.
“Over this summer, as stock, bond, and real estate markets crash….billions will rush into gold, silver, and Bitcoin.”
Despite the above bullish scenario, BTC long-term holders (LTH) continued to offload their stash, according to analyst Willy Woo.
“The big whales >10k BTC have been selling since 2017. They’re stupid! Most of those coins were bought between $0-$700 and held 8-16 years.”
Source: Glassnode
