Could the ‘Big Beautiful Bill’ and US Debt Ceiling Hike Boost Bitcoin?
The recent advancement of President Trump‘s ‘One Big Beautiful Bill’ through the Senate has sparked discussions about its potential impact on Bitcoin. The bill proposes a $5 trillion increase to the US debt ceiling, a move that has divided opinions among traders and Bitcoin advocates.
Historical Data vs. Current Expectations
Historical data does not consistently link Bitcoin price gains with US debt ceiling increases. Past increases and suspensions have generally led to bearish outcomes for Bitcoin in the following six months. The exception was the June 2023 event, which saw BTC posting gains afterward.
Bitcoin’s Current Market Position
Despite the controversy, Bitcoin has shown resilience, holding steady at $105,000. This stability comes amid widespread expectations of the debt ceiling adjustment and projections that the US government could run out of funds by mid-August.
- Bitcoin remains stable at $105,000
- US government may exhaust funds by mid-August
The Broader Economic Context
The Congressional Budget Office estimates the bill could add $3.3 trillion to the federal deficit over the next decade. Critics like Sven Henrich of NorthmanTrader argue that raising the debt ceiling amid record deficits aligns with modern monetary theory, potentially undermining the US dollar’s strength.
Bitcoin and US Treasury Yields
Bitcoin‘s performance relative to US Treasury yields suggests early signs of decoupling. While higher yields have historically correlated with Bitcoin‘s price, recent trends indicate a shift.
Looking Ahead
Some anticipate a Bitcoin rally above $110,000 coinciding with the debt ceiling increase. However, historical patterns do not support a direct causal link between these events.
