The main dishes to remember:
-
Historical data does not show a coherent link between Bitcoin price gains and the increases in the American debt ceiling.
-
Bitcoin resilience reflects the conviction of investors that the US dollar will continue to lose value due to the American fiscal policy.
The United States senators managed to advance President Trump `One Big Beautiful Bill ” Tuesday, approaching one more step towards the law. The proposed increase of $ 5 billions of the debt ceiling aroused significant controversy, and many Bitcoin defenders (BTC) think that the decision could be a catalyst for a new record of all time in 2025.
Although several solid analyzes highlight an upward perspective for Bitcoin, the former ceiling of the American debt increases and the suspensions have generally resulted in lowering results, at least in the six months that followed. In fact, the June 2023 event is the only case where BTC published Gains thereafter.
Some may say that markets are the price of these developments in advance. However, this hypothesis is weakening when you look at the flat performance of Bitcoin. Tuesday, Bitcoin held stable at $ 105,000, the same level as five months earlier.
Bitcoin resilience occurred despite the general expectations that the Trump administration was going to cross the increase in the debt ceiling. At that time, economists projected that the government would lack funds in mid-August.
Bitcoin Bull Run maintains little relationships with the American debt ceiling
The non -partisan congress budget office estimates that the proposed legislation will add at least 3.3 billions of dollars to the federal deficit in the next decade. The almost 900 -page bill was adopted in the Senate by a voting margin and now returns to the House of American Representatives.
Sven Henrich, founder of Northmerrader, criticized the claims of the American secretary of the Treasury Scott Bessent according to which the bill represents a stage towards “the control of the American debt”.
According to Henrich, the increase in the debt ceiling while “performing record deficits” and lowering interest rates align with “modern monetary theory” – an approach suggesting that governments can finance expenses by creating money, rather than taxes or borrowing.
Rather than focusing solely on legislators’ decisions, attention should turn to the way the central bank will react. If the United States Federal Reserve maintains higher interest rates, debt service costs increase. On the other hand, an evolution towards more cowardly monetary policy could undermine the strength of the US dollar.
In general, higher American treasury yields reflect a reduction in investor confidence, as buyers require greater remuneration for perceived risks. Historically, this indicator has shown a positive correlation with the price of bitcoin, which means that the two tend to increase together, given the attraction of cryptocurrency as an alternative active.
Consequently, Bitcoin holding more than $ 105,000 while the 10 -year -old treasure yield fell to 4.25% against 4.50% on June 6 suggests that the first signs of decoupling. Despite this, it remains too early to declare that Bitcoin is a proven reserve asset, in particular both gold and S&P 500 of their own summits of all time.
In relation: Bitcoin is stable because the main catalysts align for a break above $ 110,000
Indeed, wider markets seem to be prices in a lower US dollar, as evidenced by the capital which takes place in assets which traditionally benefit from a discharge of currencies, such as actions, raw materials and Bitcoin itself.
According to “Kobeissi’s letter”, the devaluation of the dollar intervenes while investors react to prices, the crisis in the expenditure of the American deficit and the pressure on the Fed to reduce rates. »»
In the end, although the increase in the debt ceiling could coincide with a Bitcoin rally greater than $ 110,000, historical models do not support a direct causal link between these events.
This article is for general information purposes and is not intended to be and must not be considered as legal or investment advice. The points of view, the thoughts and opinions expressed here are the only of the author and do not reflect or do not necessarily represent the opinions and opinions of Cointellegraph.
