Elon Musk Warns U.S. Dollar Could Be Headed for a $36 Trillion Disaster

The bitcoin price has swung wildly over the last month, bouncing between highs of $65,000 per bitcoin before crashing toward $50,000 as a legendary bitcoin trader suddenly flips his bitcoin price prediction.

Elon Musk has backed a $36 trillion warning over the spiraling interest payments on the huge U.S. national debt pile.

The bitcoin price has swung wildly over the last month, bouncing between highs of $65,000 per bitcoin before crashing toward $50,000 as a legendary bitcoin trader suddenly flips his bitcoin price prediction.

Now, Musk has backed a $36 trillion "by the end of 2024" warning over the spiraling interest payments, sharing a post from a popular finance and economics account on X.

"Interest payments on the national debt are now higher than the entire Defense Department budget and rising," Musk wrote on the platform.

"We will reach $36 trillion easily by the end of 2024," the Wall Street Silver account Musk quoted wrote. "And we are on pace for over $1.2 trillion in interest to be paid on the debt in the next 12 months. That is about 25% of all govt revenue ($5 trillion per year) going to interest on the debt."

The billionaire Tesla chief executive's介入 comes after U.S. debt interest payments are forecast to hit $870 billion this year, according to a recent analysis by the Congressional Budget Office.

This follows the Federal Reserve hiking interest rates at a never-before-seen clip in the aftermath of huge Covid-era spending and money-printing, which pushed inflation to a four-decade high.

Earlier this year, Bank of America analysts warned the U.S. debt load is about to ramp up to add $1 trillion every 100 days—fueling a potential bitcoin price surge.

The Fed is currently poised to begin an interest rate cutting cycle, with the market heavily betting on a rate cut during its September 17 to September 18 meeting.

The size of the interest rate cut and the Fed's outlook on the rest of 2024 are expected to cause volatility for the bitcoin price, wider crypto market and risk assets across the board, with one closely-watched analyst warning of "significant market pain" to come.

"Many predict that a new liquidity cycle is imminent, expecting lower interest rates to boost all asset prices, as they traditionally have. However, the critical issue is timing. Instead of taking a broad view, savvy investors focus on the details, which reveal that interest rate cuts could initially cause significant market pain," market analyst Markus Thielen, founder of 10x Research, wrote in an emailed note.

Highlighting the years 2018 and 2019 as "a notable precedent," Thielen noted: "Bitcoin sold off in the weeks following previous rate cuts while prices rallied during the pause in rate changes."

Looking ahead, Thielen anticipates "U.S. political uncertainties" and persistently weak economic data signals "potential declines for risk assets" such as bitcoin.

"Interest rate cuts do not ensure higher bitcoin prices, particularly when protocol revenues sharply decline, signaling reduced usage," Thielen said.

"These are troubling indicators, but 99% of traders remain unaware. A bitcoin drop below $50,000 is inevitable."

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