Trump’s budget proposal faces criticism due to the risk of significant deficit increase, which may create opportunities for Bitcoin.
Mounting Deficit, Minimal Offsets
The proposal, dubbed the 'One Big Beautiful Bill', promises tax relief but lacks adequate revenue balancing measures. According to the CBO, it would reduce spending by $1.3 trillion, yet cut government income by a much larger $3.7 trillion. This leads to a predicted $2.4 trillion deficit increase over the next decade.
Unrealistic Growth Targets
Some supporters suggest that economic growth could offset debts. However, the U.S. would need to sustain annual GDP growth above 20% for the next decade — an unrealistic figure. The economy actually shrank by 0.3% in Q1 2025, while the Fed projects only 3.8% growth in Q2, revealing substantial risks in future forecasts.
Bitcoin Stands to Gain
While the outlook may be bleak for traditional finance, Bitcoin may benefit from ongoing instability. Unlike fiat currencies, Bitcoin cannot be inflated at will, making it appealing for investors seeking protection against unreliable monetary policies. Diminished confidence in government bonds could make Bitcoin a more attractive option for wealth preservation.
In conclusion, Trump’s budget proposal may lead to increased deficits and create favorable conditions for Bitcoin, which is increasingly viewed as an alternative to traditional assets. Economists express concerns about the sustainability of fiscal policy, yet the political backing for the proposal remains strong.
