key takeaways:
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Historical data fails to show a consistent link between bitcoin price advantage and American debt roof.
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Bitcoin’s flexibility shows investors’ confidence that the US dollar will continue to lose price due to the US domestic fiscal policy.
Senators of the United States successfully upgraded President Trump’s ‘One Big Beautiful Bill’ on Tuesday, leading to a one -step step of making this law. The growth of $ 5 trillion proposed for debt roof has shaken significant controversy, and many bitcoin (BTC) advocates believe that this step may be a catalyst for a new all-time high in 2025.
Although many solid analysis points to a rapid approach to bitcoins, the previous American debt increases the roof and suspension usually gives rise to the results of the recession, after that in at least six months. In fact, the incident of June 2023 is the only example where BTC later posted benefits.
Some people may argue that the market price is already in these developments. However, this notion weakens due to the flat performance of bitcoin. On Tuesday, bitcoin kept stable at $ 105,000, at the same level as five months ago.
Bitcoin’s flexibility occurred despite widespread expectations that the Trump administration would proceed through the increase in debt roof. At that time, economists estimated that the government would be out of money by mid -August.
A bitcoin bull run is very less related to American debt roof
The budget office of Nonpartison Congress estimates that the proposed law will add at least $ 3.3 trillion to the federal deficit in the next decade. The around 900-Rage Bill passed a vote in the Senate with a margin and now returns to the US House of Representatives.
Northmanitrader founder Swen Henriques criticized the claims of American Treasury Secretary Scott Besant that the bill represents a step towards “controlling American debt”.
According to Heinrich, “records record deficit” and lowering interest rates are aligned with “modern monetary theory”, increasing the loan limit – suggesting that governments can spend money by making money instead of taxes or borrowings.
Instead of focusing only on the decisions of MPs, it should be noted how the central bank will react. If the US Federal Reserve maintains high interest rates, debt servicing costs increase. On the other hand, a change towards the relaxed monetary policy can reduce the power of the US dollar.
Generally, high American treasury yields reflect the trust of low investors, as buyers demand more compensation for alleged risks. Historically, this indicator has shown a positive relationship with the price of bitcoin, which means that the two arise together, given the appeal of cryptocurrency as an alternative property.
Therefore, bitcoin is exceeding $ 105,000, while the 10 -year Treasury yield fell from 4.50% to 4.25% on 6 June, suggests an early signs of decouling. Nevertheless, it stays very early to declare bitcoin as a proven reserved property, especially both gold and S&P500 reach high levels of all their own time.
Connected: Bitcoin is stable as major catalysts align for breakouts above $ 110K
In fact, the broad markets appear to priced in a weak US dollar, as clarified by capital by capital, which traditionally benefits from currency debts, such as equity, commodities, and bitcoins themselves.
According to the “The Cobcy Letter”, the dollar devaluation comes as investors react to the tariff, the US deficit crisis, and pressurize the fed to cut rates. ,
Finally, while the increase in debt roof matches with a bitcoin rally above $ 110,000, historical patterns do not support a direct cause link between these events.
This article is for general information purposes and is not intention and should not be taken as legal or investment advice. The ideas, ideas and opinions expressed here are alone of the author and not necessarily reflected or represented the ideas and ideas of the components.
