Elon Musk had a fierce reaction to the controversial spending bill supported by the Republican Party, raising questions about whether Tesla might increase its Bitcoin holdings. The bill proposes significant tax cuts for corporations and the ultra-wealthy, estimated to increase the US public debt by $3.8 trillion in the next decade. John Deaton, an XRP supporter, believes the current economic trend could drive Musk and Tesla to continue accumulating Bitcoin as a risk mitigation mechanism against the government's adventurous spending policy.
Tesla currently owns 11,509 Bitcoin according to data from Arkham Intelligence. Deaton emphasized that the bill is essentially a "living billboard for Bitcoin" because inflation and excessive public spending make decentralized assets increasingly attractive to large institutions. Elon Musk did not hesitate to call the bill a "terrible disgust" and received support from Senator Rand Paul, who also expressed concerns about the $5 trillion debt and government budget waste.
Despite the bill facing many obstacles in the Senate, it has raised the risk of severe inflation in traditional economic circles. Gold investor Peter Schiff warned that the bill would push inflation higher by deepening the budget deficit and weakening the USD. These concerns make alternative assets like Cryptoassets more attractive to institutional capital.
Additionally, Representative Marjorie Taylor Greene also opposed the bill's provision banning states from controlling Artificial Intelligence (AI) technology for 10 years. She was concerned that this violates state rights and grants too much executive power to the federal government in a context where AI capabilities are not yet fully understood. This issue adds complexity and controversy to the bill.
Looking back, Tesla drew attention by investing $1.5 billion in Bitcoin in 2021. Although it has sold some, Tesla currently holds approximately $1.2 billion in Bitcoin. Facing increasing inflation threats and diminishing confidence in fiat currency, many experts believe Tesla might quickly reinvest, using Bitcoin as an effective defensive tool against economic volatility and deficit fiscal policies.
The entire development shows a direct connection between major political and financial decisions and Tesla's strategy of integrating Cryptoassets into its portfolio. This is also vivid evidence of Bitcoin's increasingly important role in a context of growing traditional monetary risks. Elon Musk and Tesla are expected to continue leading the exploration of cryptocurrency's decentralized potential to preserve value in this challenging economic era.
