Although Trump's "Great and Beautiful Act" does not involve encryption clauses, the expectation of liquidity injection remains favourable for the market.

The Indirect Impact of the "Big and Beautiful" Budget Bill on the crypto market

Although the landmark budget bill supported by President Trump (known as the "Great and Beautiful Act", H.R. 1) did not include any direct provisions for cryptocurrency, market analysts believe its potential liquidity injection effect could be a positive factor for crypto assets. The bill was passed in the U.S. House of Representatives on July 3 (Thursday) by a narrow margin (218-214 votes).

The Content of the Bill and the Missing Crypto Proposal

This large-scale budget proposal focuses on expanding the scope of tax cuts and reducing welfare spending. Notably, despite the efforts of Senator Cynthia Lummis, who supports cryptocurrency, to introduce several key crypto-related amendments (including modifications regarding taxation on crypto mining and taxation on staking rewards), these proposals aimed at addressing core industry concerns were ultimately not included in the bill. The direct legislative breakthrough that the crypto industry was hoping for did not materialize. On the day the budget proposal was passed, Lummis immediately introduced a new bill specifically addressing the tax issues related to cryptocurrency.

Crypto market reacts positively: Bitcoin price rises accordingly

Despite the crypto industry feeling disappointed by the lack of direct benefits in the bill, the crypto market has given a positive response. After the budget proposal was passed, the Bitcoin price (BTC) briefly broke through $110,000. It is currently hovering around the $109,000 level, having risen 0.24% in the past 24 hours, and the total cryptocurrency market cap has also increased by 0.3%.

Liquidity Effect: The Potential Driver of the Budget Proposal on the Crypto Market

This crypto market's active response mainly stems from the market's expectations of the stimulus effect of the budget proposal. Economists predict that due to the combination of tax cuts and increased spending, this new fiscal plan could lead to an increase in the U.S. national debt by $3 trillion to $4 trillion over the next decade.

The significant increase in deficit spending is expected to inject a large amount of liquidity into the financial system. Historical experience shows that such an environment with ample liquidity is usually favorable for risk assets, including stocks and crypto market assets. Therefore, although the bill itself does not directly mention digital assets, its potential liquidity-boosting effect has already begun to actively influence crypto market sentiment.