Monday's Asian trading session opened with Bitcoin trading above $108,000. Former President Donald Trump’s recent remarks about the U.S. deficit have reinforced a bullish outlook for Bitcoin among investors.
At the same time, Ethereum broke through $2,440, supported by strong trading volume, showing bullish momentum against a backdrop of record highs in U.S. stocks, improved global liquidity, and easing geopolitical tensions.
On June 29, Trump posted on Truth Social, addressing intense debates among Republican lawmakers regarding his proposed large-scale tax cuts and spending plans. He wrote, “To all Republicans who are about saving costs, and I am one of you, remember you still need to get re-elected. Don’t get too crazy! We will make up all the losses through growth, even ten times over!”
This statement highlights significant divisions within the Republican Party regarding the legislative agenda known as the “One Big Beautiful Bill.”
This more than 900-page bill proposes a combination of approximately $3.8 trillion in tax cuts, some targeted spending reductions, and additional funding for defense and border security. It includes making permanent several provisions from the 2017 Trump tax cuts, such as eliminating taxes on tips, overtime pay, and certain auto loans; increasing the child tax credit to $2,200; and providing phased new deductions for seniors.
However, to offset the large-scale tax cuts, Republicans have proposed significant cuts to Medicaid and nutrition programs, sparking fierce intra-party debate.
Moderate Republicans from high-tax states are calling for an increase in the SALT (state and local tax) deduction cap, while conservatives are demanding deeper cuts in government spending, particularly in Medicaid. These divisions make it more difficult to secure majority Republican support in both the House and Senate, while Democrats uniformly oppose the bill, criticizing it as favoring the wealthy and exacerbating inequality.
Trump’s post aims to balance these internal pressures—on one hand, appeasing the fiscal austerity demands of conservatives, while on the other, emphasizing “making up” for revenue losses through strong economic growth and gradually reducing the deficit. This supply-side economic theory suggests that even if the national debt increases in the short term, growth will eventually “pay for everything.” However, nonpartisan analysis estimates that the bill could add trillions to the existing $36.2 trillion U.S. national debt.
Cryptocurrency analyst Will Clemente responded to Trump’s comments on X (formerly Twitter): “After seeing this, would you still want to hold long-term U.S. Treasuries? Haha... How can you not hold Bitcoin or gold?” His skepticism about long-term bonds reflects market concerns that loose fiscal policies could trigger inflation and currency devaluation.
Against this backdrop, traditional fixed-income assets like government bonds appear less attractive, as persistent deficits and potential monetary easing could undermine their value. In contrast, “hard assets” like gold and Bitcoin are increasingly viewed as stores of value and hedges against inflation and fiscal risks.
As the Senate strives to finalize the bill before the July 4 Independence Day recess, Trump’s call for unity and restraint highlights the political challenges of advancing this significant fiscal legislation. It also indicates that its ultimate fate remains uncertain, with lawmakers still attempting to find a balance between tax cuts, spending reductions, and political feasibility.
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Market Focus Shifts to Sintra Annual Policy Forum
Over the weekend, Bitcoin held near the $108,000 level as traders turned their attention to a series of global macro events this week. The highlight is the European Central Bank’s annual policy forum in Sintra, along with a scheduled speech by Federal Reserve Chair Jerome Powell on Tuesday.
Although price action has been relatively calm, signals from the derivatives market and on-chain data suggest that volatility may be about to return. Traders are closely monitoring any changes in central bank rhetoric, which could impact overall risk appetite in both crypto and traditional markets.
Independent on-chain analyst and frequent CryptoQuant contributor Axel Adler Jr. stated, “Whales are actively moving significant amounts of Bitcoin to centralized exchanges.”
Adler noted that this pattern often precedes increased volatility, especially against a backdrop of declining exchange reserves and weak stablecoin inflows.
“As long as Bitcoin remains above $108,000, the baseline expectation is for further price increases, targeting $112,000,” he wrote in his Sunday newsletter, Adler Insight.
The ECB forum, themed “Adapting to a Changing World,” will bring together Powell, ECB President Christine Lagarde, and several other central bank officials to discuss how policy might evolve in the current fragile economic environment. This week’s context includes expectations that Powell will reiterate the Fed’s cautious stance on interest rates, emphasizing the need for more conclusive data on inflation and the job market before commencing rate cuts.
Even before the Sintra meeting begins, derivatives traders are already positioning for a potential turning point in volatility.
On Saturday, Cole Kennelly, founder of Volmex Finance, pointed out that trading volume for synthetic Ethereum and Bitcoin volatility index perpetual contracts on gTrade had reached $806,000, highlighting growing market demand for exposure to directional volatility.
The Bitcoin options market also reflects trader caution. Nick Forster, founder of Derive.xyz, told Decrypt, “Approximately 20% of Derive’s open interest is concentrated in put options, with strike prices mainly at $85,000, $100,000, and $106,000.” He added, “Bitcoin traders are preparing for macroeconomic uncertainty or profit-taking after the rally.”
In other words, the options market indicates that Bitcoin investors are becoming more conservative in the macroeconomic context, hedging through put options at lower strike prices.
In contrast, the Ethereum market appears more bullish, with higher activity in call options around $2,900 and $3,200.
Forster added, “This positioning seems to be driven by expectations for the ETHCC conference in Cannes—a significant event historically associated with project launches and ecosystem growth. Traders are clearly anticipating positive catalysts that could drive prices higher.”
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Frequently Asked Questions
What caused Bitcoin to surge past $108,000?
Bitcoin’s recent price surge is largely attributed to Donald Trump’s recent comments regarding U.S. fiscal policy, which reinforced bullish sentiment among investors. Additionally, improved global liquidity and a positive risk-on environment in traditional markets contributed to the upward momentum.
How do Trump’s deficit remarks affect cryptocurrency markets?
Trump’s statements suggesting significant tax cuts and spending plans raised concerns about increased U.S. debt and potential inflation. This has led some investors to seek alternative stores of value like Bitcoin and gold, viewing them as hedges against fiscal uncertainty and currency devaluation.
What is the significance of the Sintra policy forum for crypto traders?
The Sintra forum, attended by key central bank leaders including Jerome Powell and Christine Lagarde, provides insights into future monetary policy directions. Crypto traders monitor such events for clues on interest rate trends and liquidity conditions, which significantly impact risk assets like Bitcoin.
Why are whales moving Bitcoin to exchanges?
Large holders, or “whales,” often transfer Bitcoin to exchanges in anticipation of selling or increased trading activity. This movement can signal upcoming volatility, as it may indicate preparation for significant market orders or hedging strategies.
What do current options market trends suggest about Bitcoin’s future price?
The concentration of put options at lower strike prices suggests that many traders are hedging against potential downside risks. However, the sustained price above $108,000 and bullish targets around $112,000 indicate that the overall market expectation remains cautiously optimistic.
How does Ethereum’s market outlook differ from Bitcoin’s?
Ethereum is currently showing stronger bullish signals, with high activity in call options at elevated strike prices. This optimism is partly driven by upcoming events like the ETHCC conference, where positive announcements and project launches are anticipated, potentially fueling further price increases.