Bitcoin on the rise: U.S. deficit concerns fuel its rally

Bitcoin on the rise: U.S. deficit concerns fuel its rally

In recent weeks, Bitcoin (BTC) has been experiencing significant growth that has surprised not only retail investors but also financial market experts. Crossing the $122,000 mark and reaching new all-time highs are not the result of mere hype or speculative enthusiasm. The key to this rally is a deeper macroeconomic context - growing concerns about the U.S. deficit and fiscal irresponsibility.

Macro data as a hedge against a fiscal crisis

According to leading analysts, Bitcoin has gradually transformed from a technology story to a major macro asset. Markus Thielen, head of research at 10x Research, points out that the current rally is driven more by concerns about the rampant growth of the US deficit than by the hype in the cryptocurrency market. "Bitcoin has become an insurance policy against fiscal irresponsibility in the United States," says Thielen.

Concerns about rising U.S. debt

In July, US President Donald Trump passed a law known as the "One Big Beautiful Bill Act" (OBBBA), which raised the debt ceiling by $5 trillion - the largest single increase in US history. While this move postponed the threat of default, it also increased the potential for a significant increase in the federal deficit over the next decade, estimated at more than $7 trillion.

In addition, monetary policy is easing - interest rates are expected to be cut, which further fuels interest in safe havens, including Bitcoin and gold. "Bitcoin is now positioned as the most effective hedge against this fiscal crisis," explains Thielen.

Bitcoin as a new macro position

Previously seen mainly as a technology story and digital gold, Bitcoin has turned into a macro asset, according to analysts. Its growth reflects not only the interest of institutional investors, but also deeper concerns about long-term US fiscal policy. At a time when a key legislative session in Washington is expected to address cryptocurrency regulation and other key issues, interest in bitcoin is even higher.

Legislative and regulatory developments

The so-called "crypto-week" is expected to see the passage of bills such as the CLARITY Act, which sets rules for cryptocurrencies, and the GENIUS Act, which creates a framework for stablecoins. The potential introduction of central bank digital currencies (CBDC) will also be discussed. Additionally, on July 22, when the Digital Assets Task Force report is released, increased focus on the strategy and future direction of the cryptocurrency market is expected.

Expectations and predictions

Experts agree that Bitcoin's current growth is not just a temporary thing. 10x Research has set a target value of $140,000 to $160,000 per Bitcoin for 2025. Traders and analysts then believe that surpassing the $120,000 mark is a testament to how deeply embedded digital assets have become in the portfolios of institutional investors.

"Bitcoin remains resilient despite stock market volatility and geopolitical tensions," says Eugene Cheung, chief trading officer of crypto platform OSL. He expects it could reach $130,000 to $150,000 by the end of the year.

Diversification and future trends

According to analyst Rachael Lucas of BTC Markets, Bitcoin's growth is likely to be followed by other cryptocurrencies as investors increasingly diversify their portfolios and take more risks in an uncertain environment.

Conclusion

Bitcoin's growth is now driven more by macroeconomic factors than speculation. Its role as a hedge against U.S. fiscal irresponsibility and global economic tensions puts it at the center of attention for investors seeking stability in uncertain times. If these trends are confirmed, we could see further record highs and a strengthening of the role of cryptocurrencies in the global financial architecture.

*This is not an investment recommendation.

Coingarage team