Trump’s Big Beautiful Bill: A Debt Crisis or Bitcoin’s Golden Ticket? 💸🚀

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Key takeaways:

  • So, President Trump’s One Big Beautiful Bill is here to add a whopping $2.4 trillion to the US debt. Because why not? Let’s just accelerate that debt crisis and watch inflation do the cha-cha! 💃

  • Inflation and dollar devaluation are like that annoying friend who just won’t leave the party. They’re eroding the real value of cash and bonds faster than you can say “financial hangover.” 🍾

  • Bitcoin could be your knight in shining armor, but only if you keep it close. Custodial platforms? They might just ghost you when you need them most. 👻

“Devaluations typically occur fairly abruptly during debt crises.” Thanks, Ray Dalio, for that delightful reminder! It’s like he knew we’d be walking straight into a financial horror movie. 🎬

The US budget deficit hit over $6 trillion in 2024, and Elon Musk, the former head of the Department of Government Efficiency (DOGE), tried to cut federal spending but only managed to trim $180 billion from the $2 trillion he promised. Talk about a budget diet gone wrong! 🍔

Interest rates are still at 4.5%, while the Federal Reserve is sweating bullets over the trade war’s impact on inflation. Meanwhile, the yield on 10-year Treasurys is just hanging out above 4.35%. What a party! 🎉

Let’s be real: the US debt spiral is deepening like a bad plot twist. And guess what? The likely catalyst just passed the House and is now chilling in the Senate. 🏛️

The Big Beautiful Bill will prompt higher inflation

The Big Beautiful Bill has been making headlines and breaking celebrity bromances since early May. At over 1,100 pages, it’s like the greatest hits album of past GOP policies: extended 2017-era tax cuts, a big fat erase on Biden’s green energy incentives, and tighter eligibility for Medicaid and SNAP benefits. Oh, and let’s not forget the $5 trillion debt ceiling raise! 🎤

According to the nonpartisan Congressional Budget Office (CBO), this bill would cut federal revenue by $3.67 trillion over a decade while reducing spending by only $1.25 trillion. That’s a net addition of $2.4 trillion to the already jaw-dropping debt pile of almost $37 trillion. Another nonpartisan forecaster, the Committee for a Responsible Federal Budget, added that when taking interest payments into account, the bill’s cost could rise to $3 trillion over a decade or to $5 trillion if temporary tax cuts were made permanent. Yikes! 😱

Some supporters of the bill argue that tax cuts would stimulate the economy and “pay for themselves.” But let’s be honest, the 2017 tax cuts only increased the federal deficit by almost $1.9 trillion over a decade. So, yeah, good luck with that! 🙄

The numbers matter, but what’s unfolding is bigger than a trillion here or there. As Republican Senator Ron Johnson of Wisconsin put it, 

“The CBO score is a distraction. You’re arguing over twigs and leaves when you’re ignoring the forest that’s on fire.” 🔥

The spiral of budget deficits and debt has already sucked in the US economy, and there’s no credible plan to reverse it. Spoiler alert: it’s not looking good! 😬

The US cannot “grow its way out” of debt

Some folks think the US will magically “grow its way out” of this problem. But as Sina, the co-founder of 21st Capital, noted on X,

“To grow out of this debt without spending cuts or tax increases, the US would need real GDP growth of 20%+ per year for a decade.”

With Q1 2025 registering -0.3% real GDP growth, and the US Federal Reserve estimating Q2 2025 growth at 3.8%, that’s about as likely as finding a unicorn in your backyard. 🦄

As Harvard economist Kenneth Rogoff wrote in the Financial Times, deficits are projected to exceed 7% of GDP for the remainder of Trump’s term, and that’s without a black swan event. So, buckle up! 🎢

This means that the only growth possible now is nominal. In his book, Ray Dalio outlined the four tools governments have in a debt crisis: austerity, defaults, redistribution, and printing money. The first three are painful and politically costly. The fourth, printing and devaluation, is by far the most likely. It’s silent, opaque, and easily disguised as a stimulus. It also wipes out savers, bondholders, and anyone dependent on fiat. Dalio writes,

“Most people don’t pay enough attention to their currency risks. Most worry about whether their assets are going up or down in value; they rarely worry about whether their currency is going up or down.”

Not your keys, not your coins

This is where Bitcoin enters the picture—not as a speculative trade, but as a monetary insurance policy against the US debt crisis. Because who doesn’t want a little insurance in this wild ride? 🏍️

If, or when, the US chooses to inflate its way out of debt, nominal Treasurys and cash will see their real value erode faster than your will to live during a boring meeting. Artificially suppressed interest rates and forced bond purchases by institutions could further drive real yields into negative territory. 😩

Bitcoin is engineered to resist this outcome. With its fixed supply and independence from government monetary policy, it offers what fiat cannot: a refuge from financial repression and currency debasement. Not to mention a yield that can put bonds to shame. As Bitwise analysts have noted, Bitcoin’s scarcity and resilience position it uniquely to benefit from fiscal instability. 💪

However, not all Bitcoin exposure is equal. In a crisis scenario, when the government can justify financial repression in the name of “economic stability,” custodial risks are high. ETFs and any other custodial services may simply fail to honor redemptions. The only true protection comes from self-custody, cold storage, private keys, and full control. Because who wants to be left out in the cold? ❄️

Rogoff put it plainly:

“US fiscal policy is running off the rails, and there seems to be little political will in either party to fix it until a major crisis occurs.”

So far, the Republican-controlled Congress hasn’t rejected a single Trump proposal, making the odds of the Big Beautiful Bill becoming law high. So is the likelihood of a full-blown debt crisis. In that world, hard assets in self-custody will matter more than ever. 🏆

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of CryptoMoon.

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2025-06-12 23:16