Bitcoin and Gold Seen as Big Winners from $2.5 Trillion Deficit-Boosting Tax Cuts

Spencer Hakimian, founder of Tolou Capital Management, has predicted that the Republican-backed tax cut bill unveiled today could boost the U.S. deficit by $2.5 trillion—an outcome he believes will be highly bullish for Bitcoin (BTC) and gold. The bill proposes $4 trillion in tax reductions while slashing spending by only $1.5 trillion, creating a significant fiscal gap.

Hakimian, a prominent voice in the finance world amid current economic uncertainty, argues that the resulting loose fiscal policy will favor inflation-hedge assets like Bitcoin and gold, as investors seek protection from weakening fiat currency. Bitcoin surged to a new multi-month high of $105,503 after reports of the tax proposal and the U.S.-China tariff truce, though it later pulled back by over 2%.

While the expected rise in the deficit could stimulate the stock market in the short term, Hakimian warns that bonds will take a hit as the government will likely need to issue more debt to finance the shortfall. This dynamic could further strengthen Bitcoin’s appeal as an alternative asset.

Fox Business reporter Charles Gasparino also noted that using tariffs to reduce the deficit is now “off the table” following the U.S.-China agreement. This adds pressure on traditional financial mechanisms and strengthens the case for decentralized assets.

Past advocates like Senator Cynthia Lummis have claimed Bitcoin could play a role in solving America's debt crisis, although others, including former BitMEX CEO Arthur Hayes, doubt the U.S. government would adopt Bitcoin due to its fiscal stance.

As the national deficit balloons, the macro environment continues to tilt in favor of digital assets, making Bitcoin a key player in the evolving economic landscape.