President Trump's "One Big Beautiful Bill" budget proposal is expected to add $2.4 trillion to the U.S. national deficit over a decade.
The bill's proposed tax cuts have no corresponding spending cuts, which is likely to deepen America's debt spiral and fuel inflation.
Economic growth alone is insufficient to offset the debt, with the US economy needing an unrealistic 20% annual GDP growth for ten years.
Bitcoin is likely to be a beneficiary of the resulting issues, considering its role as a hedge against currency devaluation.
Despite congressional support, economists warn of an incoming crisis if the U.S. continues its current fiscal policy.
President Donald Trump’s controversial budget proposal, dubbed the “One Big Beautiful Bill” now sits in Senate limbo, and speculators are pointing out serious issues with it.
For starters, the bill could deepen America’s already problematic debt spiral. It could push inflation higher and devalue the U.S. dollar, among other things.
However, while Washington continues to wrestle with its economic strategy, Bitcoin seems to be poised for victory.
Could Trump’s fiscal vision spark a full-blown U.S. debt crisis and ignite a Bitcoin boom?
Let’s take a look.
One of the biggest aspects of this controversy is the projected $2.4 trillion addition to the national deficit.
While this “Big Beautiful Bill” promises sweeping tax cuts including breaks for tips, overtime and senior benefits, it has no spending cuts to compensate for all that money.
Trump’s new bill
According to the nonpartisan Congressional Budget Office (CBO), the bill slashes around $1.3 trillion from the US’ spending but reduces revenue by $3.7 trillion over a decade.
This means that the US will automatically rack up a $2.4 trillion debt.
Supporters claim the tax cuts will boost the economy enough to remove the risks of this problem. However, history tells a different story.
The 2017 tax cuts under Trump followed a similar logic and ended up adding nearly $1.9 trillion to the national debt, even after accounting for economic growth.
Some argue the U.S. can “grow out of” its debt by ramping up GDP.
However, to make the math work, America would need to hit real GDP growth of over 20% every year for the next ten years.
This goal is simply not realistic by any means.
For context, the first quarter of 2025 recorded a -0.3% GDP contraction, while the Federal Reserve estimates second-quarter growth at just 3.8%.
The issues with the Trump bill
These are nowhere near the needed 20% growth to offset debt.
As economist Kenneth Rogoff put it, the U.S. is likely to see deficits above 7% of GDP for the remainder of Trump’s term.
Even then, this estimate assumes that no major economic shocks (like a war or another Covid 19) will occur.
This move is great for Bitcoin, however terrible it might be for the US economy, and here’s why.
Unlike fiat currencies, Bitcoin is immune to government monetary manipulation. New Bitcoin cannot be printed at will, and the cryptocurrency is immune to inflation.
Because of this, investors looking for a hedge against devaluation may flock to it the same way they once turned to gold.
Its decentralized nature means no central bank can inflate it, and no government can confiscate it.
As assets like Treasurys lose their appeal, Bitcoin will show up as more and more of a viable alternative to investors who wish to preserve their wealth.
So far, financial institutions and investors are already responding. Bond yields are climbing, and Treasuries which were once viewed as the safest investment in the world, are coming under fire.
So far, the Republican-controlled Congress has yet to reject a single Trump proposal, which means that the bill is likely to be passed.
Kenneth Rogoff summed it up bluntly: “U.S. fiscal policy is running off the rails, and there seems to be little political will in either party to fix it until a major crisis occurs.”
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