On July 4, the U.S. House of Representatives approved Donald Trump's tax cut and spending bill, which could affect financial markets and lead to volatility for major assets.
House Bill Approval
On July 4, the U.S. House of Representatives passed Donald Trump's tax cut and spending bill, known as the "One Big Beautiful Bill Act." This legislation aims to extend the tax cuts of 2017 and introduce new relief measures, including ending taxes on tips and overtime. Former President Trump expressed his enthusiasm, stating, "We are delivering the One Big Beautiful Bill Act to the American people, which will not only extend the 2017 tax cuts but also provide critical tax relief to hard-working citizens." House Speaker Mike Johnson secured essential votes for its passage.
Impact on Financial Markets
The changes in taxation policy are central to this legislation, altering the fiscal landscape by expanding tax cuts and initiating new spending for defense and immigration. These changes may shift lawmakers' focus to budget adjustments in other areas. Immediate market reactions have been muted, with no direct statements from major exchanges or on-chain data. However, historical patterns suggest increased volatility for major assets like BTC and ETH due to global macroeconomic conditions.
History of Tax Reforms and Cryptocurrencies
Trump's initial 2017 tax cuts contributed to a late 2017 crypto bull run, boosting capital and market confidence post-enactment. As of July 3, 2025, Bitcoin (Ticker: BTC) trades at $109,599.88 with a market capitalization of $2.18 trillion, controlling 64.45% market dominance. Historical trends indicate that fiscal expansion could weaken the USD, potentially boosting BTC as an inflation hedge, while technological implications for DeFi and Ethereum could emerge.
The passage of the tax reform bill has the potential to affect the financial state of the market and geopolitical conditions. Its lasting implications on the markets remain to be evaluated.
