The post Bitcoin Set to Benefit from $2.5 Trillion Deficit Spike Under New U.S. Tax Proposal appeared on BitcoinEthereumNews.com.

The Republican tax bill proposes $4 trillion in tax cuts and may add $2.5 trillion to the national deficit. Bitcoin, gold, and stocks could rise as investors respond to loose fiscal policy and higher debt. Republicans in the U.S. House of Representatives have proposed a sweeping tax-cut bill projected to add $2.5 trillion to the national deficit. The committee in charge of taxes put forward a bill that would cut taxes by $4 trillion, with $1.5 trillion in spending cuts to balance it. The bill also increases the national debt ceiling by $4 trillion. Spencer Hakimian, founder of Tolou Capital Management, warned that the deficit increase will heavily impact bond markets. According to Hakimian, the U.S. government will need to issue significantly more debt, putting downward pressure on bond prices and returns. He described the situation as “terrible” for bonds. 🚨🚨 House tax proposal is out. $4T in Tax Cuts$1.5T in Spending Cuts Another $2.5T added to the deficit. Amazing for Stocks, Gold, and Bitcoin. Terrible for Bonds. Same old story as always. pic.twitter.com/uQMaLrkGCN — Spencer Hakimian (@SpencerHakimian) May 12, 2025 Other asset classes are expected to benefit despite the strain on fixed-income markets. Hakimian believes the bill’s loose fiscal policy will drive increased interest in inflation hedges such as Bitcoin and gold. He also noted that U.S. stocks could rally as a result of the stimulus-like effect of widespread tax cuts. Major Cuts Paired With Healthcare and Education Changes The bill includes proposals for tax breaks aimed at multiple groups: tipped workers, those earning overtime pay, private school families, seniors, and residents in states with high local taxes. The legislation also makes permanent the Trump-era tax cuts originally set to expire this year. To partially offset revenue losses, Republicans propose $912 billion in spending cuts over the next decade.…

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Filed under: News - @ May 13, 2025 9:23 am