President Trump “One Big Beautiful Bill” cleared the Senate, proposing a $5 trillion debt ceiling increase. While crypto traders speculate this could propel Bitcoin to new highs, historical patterns reveal no consistent correlation between debt ceiling hikes and BTC gains. The bill’s projected $3.3 trillion deficit expansion may fuel inflation, potentially boosting Bitcoin’s appeal as a hedge—yet market reactions remain muted, with BTC holding steady at $105,000.
Fiscal Impact and Market Realities
• Deficit Expansion: The Congressional Budget Office estimates the bill will add $3.3 trillion to the U.S. deficit over the next decade, heightening inflation risks.
• Inflation Hedge Dynamics: Experts suggest persistent inflation could reinforce Bitcoin’s “digital gold” narrative, especially as companies like MicroStrategy hold BTC to counter fiat devaluation.
• Historical Mismatch: Analysis of past debt ceiling increases (2011–2023) shows only one instance (June 2023) correlated with BTC gains, undermining direct causality claims.
Policy Gaps and Market Sentiment
The bill omitted Senator Cynthia Lummis’ proposed crypto tax incentives, limiting immediate adoption potential. However, its 100% bonus depreciation clause could accelerate ASIC miner deployment, historically aligning with bullish cycles during monetary expansion . Meanwhile, Bitcoin’s stability amid 10-year Treasury yield fluctuations signals early decoupling from traditional markets.
Broader Economic Context
Sven Henrich of NorthmanTrader notes the bill exemplifies “modern monetary theory”—funding spending via money creation rather than taxes or borrowing. This approach, combined with potential Fed rate cuts, may further erode dollar strength, indirectly benefiting alternative assets like Bitcoin.
“Every new trillion of debt is free advertising for Bitcoin,” states Steven Rossi, CEO of Worksport, highlighting how fiscal policies could amplify crypto’s store-of-value narrative.
