Bitcoin is hitting new highs, but experts say the reason isn’t hype — it’s fear over the growing U.S. deficit.
On Monday, Bitcoin topped $121,000, setting a new all-time high. But according to Markus Thielen, head of research at 10x, this rally is different. In a note shared with Cointelegraph, he explained that Bitcoin has shifted from being a tech-focused asset to a macroeconomic one — a hedge against U.S. fiscal instability.
“No one is talking about blockchain or Bitcoin’s tech anymore,” Thielen said. “It’s now seen as protection against reckless government spending.”
A $7 Trillion Deficit Shift
The shift in sentiment stems largely from growing concerns over U.S. debt. Thielen pointed to former President Trump’s “One Big Beautiful Bill Act” (OBBBA), passed in July, which raised the debt ceiling by $5 trillion — the largest increase in U.S. history.
Although the bill promised to cut the deficit by $2 trillion, projections now show it could increase the deficit by $2.3 to $5 trillion, leading to a potential $7 trillion swing from original expectations.
With the deficit ballooning and the Fed expected to loosen monetary policy with possible rate cuts, Thielen said Bitcoin is becoming the “ultimate beneficiary” of this economic environment.
“This isn’t just another crypto rally. It’s a direct reaction to the U.S. fiscal situation unraveling much faster than expected,” he noted.
Bitcoin and Gold: Safe Havens
Thielen believes Bitcoin is now seen alongside gold as a primary hedge against a potential financial crisis, which he says is intensifying.
Upcoming Catalysts
Several upcoming events could influence Bitcoin’s next moves:
- “Crypto Week” in Washington D.C.: Lawmakers will review three major bills:
- CLARITY Act – establishes clear crypto market regulations.
- GENIUS Act – sets a legal framework for stablecoins.
- Anti-CBDC Surveillance State Act – opposes surveillance via central bank digital currencies.
- July 22: Trump’s Digital Asset Task Force is expected to release a crypto policy report, possibly including a Strategic Bitcoin Reserve proposal.
- July 30: The Federal Reserve will meet. While rate cuts are expected, futures markets currently see a 93% chance rates will stay the same.
Analyst Reactions to Bitcoin’s New High
- Eugene Cheung, Chief Commercial Officer at OSL, said Bitcoin remains strong despite global stock market volatility caused by geopolitical tensions and tariffs. He believes Bitcoin could reach $130,000 to $150,000 by the end of the year.
- Rachael Lucas, analyst at BTC Markets, said crossing $120,000 shows how deeply Bitcoin is now embedded in institutional portfolios.
- Nick Ruck, research director at LVRG, expects altcoins to follow Bitcoin’s upward trend as investors diversify and take on more risk.
In summary, Bitcoin’s rally is being driven less by excitement and more by growing anxiety about the U.S. economy — positioning the cryptocurrency as a new kind of financial safe haven.
