🇺🇸 The US Massive Tax and Spending Package and Its Potential Impact on the Crypto Market

The US Senate passed a procedural vote 51 to 49 to advance the massive tax and spending bill, described by President Trump as "big and beautiful," increasing the likelihood of the bill’s full approval in the coming days.

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💡 Economic Implications of the Bill:

Tax Cuts and Increased Spending:
Corporate tax reductions and increased public spending could stimulate economic growth in the short term, signaling positive outcomes especially for corporate earnings and stock markets.

Budget Deficit and Inflation Risk:
However, increased expenditures may widen the US budget deficit and heighten inflationary pressures, potentially causing fluctuations in interest rates and macroeconomic uncertainty.

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💰 Evaluation from a Crypto Market Perspective:

1. Short and Long-Term Dollar Trends:
In the short term, the dollar may strengthen on expectations of economic growth, which could put downward pressure on cryptocurrencies like Bitcoin. Over the long term, however, the rising budget deficit and debt levels might weaken the dollar’s value, increasing Bitcoin’s appeal as an inflation hedge.

2. Fed’s Interest Rate Policy and Inflation:
If the spending package fuels inflation, the Federal Reserve may continue raising interest rates. While a high-rate environment limits demand for risk assets, persistent inflation supports Bitcoin demand.

3. Institutional Investments:
Tax cuts empower corporations with more liquidity, potentially leading to increased institutional investments in Bitcoin and other cryptocurrencies.

4. Overall Market Sentiment and Risk Appetite:
Growth expectations tend to boost investor risk appetite, positively affecting crypto markets. However, interest rate and dollar pressures may cause short-term volatility.

While this package supports the US economy in the short term, it may introduce volatility in traditional and crypto markets through budget deficits, inflation, and monetary policy in the medium to long term. Bitcoin’s role as digital gold could become increasingly important amid these uncertainties.

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