The post Cryptocurrency Investment And Fiscal Policy appeared on BitcoinEthereumNews.com.

Introduction Risk-on assets thrive when there is enough money in circulation. Such assets include cryptocurrencies, stocks, high-yield bonds and other emerging markets with attractive profits. Who decides how much money is available to public for spending? Obviously, it is the government of a country. The governments devise financial plans for a fiscal year, and term them as fiscal policies. Fiscal Policy Governments have many tools up their sleeve to manage the economy. Fiscal policy is a tool that a government uses to collect taxes, manage spending so that economy can run stably and wealth can be distributed rationally. The aims of setting a fiscal policy is to control inflation, create job, avoid or ward off recession, and promote steady economic growth. On-chain activities on many blockchains confirm the fact that volumes surge when the government decides to cut taxes and boost spending. People have more savings to spend on speculative assets like cryptocurrencies. However, there are three types of fiscal policies. Each has its own functions and restrictions. Not every one of them is conducive to the crypto market. Types of Fiscal Policy 1. Accommodative (Expansionary) Fiscal Policy In simple words, an expansionary fiscal policy aims to spend more than earn. Taxation policies are loosened to accommodate citizens. This kind of policy is usually implemented when there is a risk or onset of recession, or when there is any economic emergency like Covid-19 in 2020. Such situations result in widespread layoffs. Unemployment rises to unwanted levels. People have less to spend, so the demand for goods and services plummets headlong. These circumstances dent any economy badly. The government responds by stimulating public spending by giving tax rebates. Savings increase and people tend to consume goods and hire services. Rising demands also creates new jobs. For example, a family will consider…

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Filed under: News - @ September 14, 2025 1:25 pm