A week ago, the US woke up to a massive $4 trillion tax and spending package bill, One Big Beautiful Bill Act” (OBBBA). Responding to the ambitious package, several crypto communities murmured to themselves: Does the big beautiful bill have an impact on crypto? Does it have anything to do with crypto? The answer is a big no, with some percentage of big yes.
The One Big Beautiful Bill and the beautiful assumptions about its impact on crypto
Things have changed the way crypto behaves in response to any governmental announcements. Not everything in crypto reacts to the external stimuli like government or institutional decisions, but some reactions are more driven by market makers.
The US President Donald Trump signed the bill into law on July 4 with a 218-214 vote, creating a huge tax reduction in the country. And, the bill has given up optimistic vibe to the crypto market, although it does not cover any crypto-related matters.
US Senator Cynthia Lummis proposes a crypto tax reform bill
Senator Lummis proposed clear crypto tax reforms, criticizing the government’s double taxation policy on crypto miners and stakers. Her last-minute rush to include the tax reforms in the one big beautiful bill did not show any fruitful gains.
And, this is attributed to the reason why some crypto enthusiasts expected the bill would include crypto tax reform, and it would lift the crypto price.
However, Arthur Hayes, the co-founder and former chief of BitMEX crypto exchange, finds nothing beautiful in the big beautiful bill. A few weeks ago, he predicted the Bitcoin price would drop to $90,000. His prediction, although it went wrong, was a solid statement that the bill increases the debt ceiling and cuts taxes, leading the US Treasury to borrow more money. If this happens, the Treasury would borrow more money to rebuild its Treasury General Account. Eventually, when investors and institutions buy Treasury securities, it can drain cash from other markets, including crypto. This liquidity drain can cause a market dip, according to Hayes’ arguments. Whatsoever, he said, Bitcoin would continue to move forward after the short downtrend.
Looking more into the bill’s impact, several reports insinuated that when the government spends more on infrastructure, digital and AI innovation, clean energy, and military, more money flows into the economy, leading to a high inflation rate. Inflation happens when more money flows into a specific market. To maintain the inflation rate, the US Federal Reserve would likely impose an interest rate. A high interest rate means less borrowing power, drying up the tendency of crypto investors to put money in crypto.
Blistering Bullish signal outperforms the market
The insights provided by Arthur, however, are not connected to his bullish statements on Bitcoin. In detail, the crypto enthusiast’s remarks were all about the big beautiful bill’s impact on Bitcoin, meaning he has been coming up with optimistic statements on the price of the coin.
Earlier, he predicted that Bitcoin would $200,000 this year and $1 million by 2028.
US Crypto Week adds to the bull vibe
Crypto Week by the US government has pulled more traction from crypto aficionados. July 14 – July 18 is considered Crypto Week by the U.S. House of Representatives to decide voting on the GENIUS Act (stablecoin-friendly act), CLARITY Act, and the Anti-CBDC Surveillance State Act. If these three acts receive favourable votes, they can reportedly bring more opportunities for the crypto market to surge.
Bitcoin ETFs, institutional adoptions, Elon Musk’s America Party share some significant growth
Since the US Securities and Exchange Commission (SEC) approved the first spot Bitcoin Exchange-Traded Funds (ETFs) in 2024, analysts have been waiting for a bullish wave. According to reports, a massive institutional inflow of Bitcoin has led to the current state of the crypto market.
A recent post by Strategy founder Michael Saylor read that his company has acquired 4,225 BTC for $472.5 million at $111,827 per bitcoin.
Fintech investment company BlacRock is also not bad at Bitcoin and Ethereum acquisition. The company holds nearly 403,725 Bitcoin, valued at around $27.73 billion, and 1.311 million Ethereum, worth roughly $3.58 billion.
Elon Musk’s America Party launch and embracing Bitcoin is a hopeful feeling for cryptocurrencies, as he states, “fiat is hopeless”, replying to an X user’s question: “Will America Party embrace Bitcoin”?
Analysts and crypto firms are shedding more light on the record price breaks in the near future. As British Bank Standard Chartered predicts, Bitcoin would likely hit $200,000 by the end of this year. With the new all-time high of $122,00, the crypto community is holding its breath to see what happens next, both for Bitcoin and other altcoins.
