Bitcoin (BTC) broke $111,000 yesterday, an all-time high.
Source: coingecko.com
And since everyone knows I’m a crypto bull, I keep getting the same question thrown at me.
Last night, even my wife asked: “Ian, what’s causing this rally?”
My short answer?
Trump’s One Big Beautiful Bill.
My longer answer? Also that… but I need to explain further.
You see, there’s never just one reason behind a rally like this one.
The fact that the Trump administration is embracing crypto is certainly a driving factor here.
But I believe the biggest reason for this recent surge is the sweeping bill full of President Trump’s legislative priorities — officially dubbed the One Big Beautiful Bill Act — that was passed by the House of Representatives early yesterday.
The “big, beautiful bill” is certainly big…
It extends the 2017 tax cuts and adds new ones, including no taxes on tips, overtime or car loan interest.
It also introduces $1,000 “Trump” savings accounts for kids born between 2024 and 2028.
But this bill isn’t “beautiful” for fiscal conservatives…
Because it’s a spending spree that allocates billions for defense, border security and Trump’s “Golden Dome” missile defense shield.
And while it rolls back green energy tax incentives and implements stricter work requirements for Medicaid and food assistance programs, it also increases the debt limit by $4 trillion.
Blend all of these tax cuts and spending hikes together with a debt limit increase, and it paints a pretty clear picture of why BTC is ripping higher…
What’s Really Driving the Recent Bitcoin Surge?
The “big, beautiful bill” cuts taxes for individuals and businesses, but it doesn’t reduce government spending.
If anything, it increases it.
Critics warn the bill that just passed the House could add up to $5 trillion to the national debt over the next decade.
That means a bigger deficit…
Which leads to more borrowing…
Which means more money needs to be printed to service the increasing debt.
It’s a cycle of fiscal insanity that has driven the U.S. for decades.
Even if the Fed doesn’t technically fire up the presses to print that money, the effect is the same…
It leads to a higher nominal GDP, higher inflation and a lower purchasing power for the U.S. dollar.
And that, my friends, is why bitcoin is surging again.
In times like these, it becomes more than just a speculative asset…
It becomes a hedge against fiscal insanity.
As I’ve said before, back when bitcoin first hit the scene, early believers marketed it as “digital gold.”
That narrative fell apart over time, especially as bitcoin began moving in lockstep with tech stocks.
But something changed in the last few months.
Bitcoin started to decouple from tech stocks…
And more importantly, it’s begun to recouple with gold, which was once considered the ultimate safe haven asset during times of uncertainty.
Source Newhedge.io
Bitcoin is attractive right now for the same reasons gold has always been attractive:
It’s finite.
It’s decentralized.
And it’s largely immune to the political decisions of any one country.
In a world facing a possible global trade war — with tensions still high between the U.S., China, and the EU — assets that aren’t tied to any single nation are back in demand.
That’s why bitcoin is trading like a store of value again.
And it’s why institutional money is taking cryptocurrencies more seriously.
As of the end of 2024, professional investors managing over $100 million held approximately $27.4 billion in U.S. bitcoin ETFs.
That represents over 26% of the total assets under management in these funds…
And it tells me that crypto isn’t a fringe idea anymore.
Here’s My Take
I’m on record that we could see $1 million bitcoin by the end of the decade. Perhaps a lot sooner.
And it’s clear to me that bitcoin’s return to a “digital gold” narrative has legs…
But whether the price keeps climbing from here will depend on how much trust investors maintain in the U.S. economy and the U.S. dollar.
If the One Big Beautiful Bill passes in full and deficit spending keeps surging, don’t be surprised if bitcoin makes a run toward $150K by year-end.
Which means this latest crypto rally might just be getting started.
Regards,
Ian King
Chief Strategist, Banyan Hill Publishing
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