Bitcoin Poised for Major Surge as US Fiscal Troubles Deepens
Bitcoin could climb as high as $230,000, driven by mounting concerns over America’s rising debt and proposed tax cuts under President Donald Trump. According to Bitwise researchers André Dragosch and Ayush Tripathi, growing investor anxiety about the risk of a government default is pushing Bitcoin into the spotlight as a potential safe-haven asset.
Image 1: Bitcoin (CoinMarketCap)
US Fiscal Policy Pushes Demand for Bitcoin
Bitwise’s latest outlook ties Bitcoin’s projected surge to fears over the United States’ financial health. The analysts believe that Trump’s proposed “One Big Beautiful Bill Act,” which includes major tax reductions, could worsen the federal budget situation. They explain that U.S. government spending—particularly on compulsory programs like social welfare, interest payments, and unemployment benefits—has already exceeded its income from taxes. The tax cuts, they warn, will only increase this imbalance.
The U.S. Congressional Budget Office (CBO) supports this concern. It expects that interest payments alone will triple by 2030, from about $1 trillion to $3 trillion. This projection underlines the pressure on the American economy, particularly as more of the federal budget will need to go toward servicing debt rather than productive investment.
Elon Musk, who had previously been involved in efforts to improve government efficiency, has publicly stepped away from these efforts, stating that spending cuts alone will not solve the debt crisis. This recent disagreement with President Trump has added to investor unease.
Dragosch and Tripathi argue that in this climate, Bitcoin is becoming a useful financial safeguard. Since it is not tied to any central authority and is limited in supply, it offers protection against the risks tied to traditional financial systems. Their modelling shows that, considering current risks, Bitcoin’s true value could be close to $230,000.
Strong Market Confidence Supports Growth
Investor sentiment has been improving across the board. Bitwise’s internal measures show that optimism is growing in both crypto markets and traditional finance. Their sentiment index reveals that the majority of indicators are currently moving in a positive direction. This suggests rising confidence and increasing participation among investors.
Bitcoin’s price has already bounced back from a temporary drop caused by the Musk-Trump conflict, regaining ground near $110,000. Analysts attribute the rebound to short futures being cleared out—essentially forcing investors who had bet against Bitcoin to buy back in, which added to the upward momentum.
Institutional investment continues to build. Several major Bitcoin exchange-traded funds (ETFs), including those operated by Bitwise and BlackRock, have received strong inflows of capital. The Bitwise Bitcoin ETF added more than $78 million last week, while BlackRock’s iShares Bitcoin Trust attracted over $300 million. This signals growing interest from large investors who are looking for assets outside of the traditional financial system.
Ethereum has also attracted significant investment, particularly through spot ETFs in the United States. Although Ethereum lagged behind Bitcoin in performance last week, it still brought in more than $250 million in net investment. A small number of altcoins also performed well, although only about 15% of those tracked by Bitwise outpaced Bitcoin.
Image 2: Bitcoin (Source: CoinMarketCap)
Market Data Signals Uptrend
On-chain data also supports the bullish outlook. Large Bitcoin holders, often called ‘whales,’ have been steadily removing coins from exchanges. This trend suggests they intend to hold their assets long-term, reducing the amount of Bitcoin available for trading and potentially lifting prices.
Selling pressure on exchanges has declined. Net outflows from spot exchanges have decreased from the previous fortnight, and buying activity has begun to stabilise. Metrics like the Spot Cumulative Volume Delta, which tracks buying versus selling volume, still remain slightly negative but are showing signs of slowing downward momentum.
Trading activity in futures and options also points to optimism. Open interest in Bitcoin futures has increased, particularly on major platforms like the CME. Positive funding rates indicate that long positions—bets on the price rising—are in control. The annualised return from three-month futures contracts stayed steady at over 6%, and options market data shows growing activity, although demand for downside protection has eased slightly.
Volatility has remained subdued. Implied volatility for one-month at-the-money Bitcoin options sits at around 41%, while realised volatility dropped to 28% last week. This calm market behaviour tends to attract more cautious investors, adding further support to the asset.
Read Also: Bitcoin Price Today Steady at US $105,700 – Full Crypto Market Report
Overall, the data presents a strong case for Bitcoin’s continued growth. Bitwise researchers suggest that as government debt issues continue and more people seek financial security outside of traditional institutions, Bitcoin could climb to $200,000 by year’s end and potentially reach $230,000 in value.
