Senate Passes Tax Reductions with Vice President's Decisive Casting Vote in America
The U.S. Senate passed the One Big Beautiful Bill (OBBB) on July 1, 2025, a significant piece of tax legislation that could have far-reaching impacts on the global economy and the cryptocurrency market.
### Macroeconomic Impacts of the Tax Bill
The bill, characterised as "big and beautiful" by President Donald Trump, includes massive tax cuts and spending, which could significantly increase the U.S. national debt, raising concerns about inflation. It maintains a competitive corporate tax rate of 21%, expected to drive investment and job growth. The bill is projected to increase the long-run GDP by 1.2%, despite reducing federal tax revenue by $4 trillion on a dynamic basis. However, the large-scale fiscal stimulus and tax cuts are expected to be inflationary, increasing overall price levels in the economy.
### Impacts on Bitcoin and Ethereum
The inflationary pressures and growing national debt are likely to bolster demand for Bitcoin as a hedge against inflation and U.S. dollar debasement. Bitcoin is often seen as a "digital safe haven" when fiat currency risks rise. Ethereum and related infrastructure-based altcoins may also benefit since investors might seek higher-risk, high-reward crypto assets amid inflation uncertainties and shifting economic conditions.
The broader crypto market is showing bullish sentiment following the Senate’s approval of the bill, reflecting optimism about cryptocurrency as an inflation hedge and alternative asset. While Bitcoin could gain strong defensive appeal, some speculative tokens and meme coins might underperform in a cautious market environment.
### Summary
The passage of the U.S. Senate tax and spending legislation is poised to have a supportive macroeconomic effect on Bitcoin and Ethereum markets. The bill’s economic stimulus may also promote greater investment in crypto infrastructure tokens, underpinning a positive macroeconomic backdrop for these leading cryptocurrencies. Thus, concerns over inflation and fiat currency devaluation could drive demand for Bitcoin and Ethereum as inflation hedges and store-of-value assets.
- The growing political nuances around the One Big Beautiful Bill (OBBB) could lead to changes in crypto regulations, potentially impacting the trading of various cryptocurrencies, including Bitcoin and Ethereum.
- OBBB's inflationary pressures and the increasing U.S. national debt may spark interest in altcoins as investors seek higher-risk, high-reward assets amidst economic uncertainties and shifting conditions.
- The general-news landscape is filled with discussions surrounding the potential influence of the OBBB on the cryptocurrency market, focusing on Bitcoin and Ethereum as major players and potential inflation hedges due to economic conditions brought about by the bill.
