The US Senate Has Just Approved Trump's "Big Beautiful Bill": Here's What It Means For Crypto

Key Insights:

• The US Senate has passed President Donald Trump’s “Big Beautiful Bill.”
• This bill is a $3.3 trillion fiscal package that is now awaiting final approval in the House.
• One way or another, this bill is expected to massively affect the crypto market, and the FED’s reaction could be the key.

The U.S. Senate has just passed former President Donald Trump’s massive $3.3 trillion fiscal package bill. This bill is dubbed the “Big Beautiful Bill,” and while it still needs final approval in the House, it has some serious implications that any crypto user should be aware of.

This bill can massively boost inflation, weaken the dollar and even push investor behavior towards extremes across the defi and trad-fi markets. Here are the details to keep in mind.

What’s in the “Big Beautiful Bill”?

This bill, in simple terms, is a massive tax-and-spending overhaul. Some of its major aspects include making Trump’s 2017 tax cuts permanent and introducing new deductions and tax credits for middle-class Americans.

Other aspects include reducing federal spending on programs like Medicaid and SNAP and creating new financial tools like “Trump accounts” for child savings.

However, this bill isn’t just about fiscal policy in the trad-fi sense. Lawmakers and industry leaders involved in the bill also pushed to include reforms targeting the crypto sector.

A Missed Opportunity for Crypto Tax Reform

For months, crypto advocates pushed to include three major tax reforms. The first is the De minimis exemption. It is aimed at allowing Americans to make small crypto transactions (e.g., under $600) without having to pay capital gains taxes..

The second is Staking and mining clarity, which will make sure that rewards from validating crypto networks are only taxed when sold, not when earned. Finally, the Mark-to-market accounting will allow businesses to treat unrealized crypto gains as part of their balance sheet reporting.

Senator Cynthia Lummis (R-WY) led the charge to add these reforms to the bill. However, the final hours of debate were chaotic, and the crypto amendment simply “ran out of time” according to policy insiders.

How Does This Affect Crypto Investors?

Even without the tax changes being approved, the crypto market is expected to feel the effect of this bill regardless. For starters, the inflationary pressures this bill will introduce are expected to boost Bitcoin.

The US government is set to borrow over $3 trillion to fund this package, and inflation fears are back on the table. Historically, Bitcoin tends to thrive in periods of monetary uncertainty, considering its status as “digital gold.”

Bitcoin versus the US dollar, Source: MacroMicroAnother important aspect to keep in mind is that a rise in federal debt could push yields on the U.S. Treasuries down and make bonds making bonds less attractive. That may push investors to move funds into assets like crypto and boost prices

If the House revives the crypto tax reforms before final passage, investors could face fewer headwinds when using crypto. When retail interest is combined with the institutional kind, prices across the board are expected to skyrocket.

Short-Term Crypto Market Outlook

If the House passes the bill with or without crypto provisions, market sentiment could still lean bullish for digital assets

Analysts generally believe that the total crypto market cap could test the $3.5 to $3.7 trillion range in the coming weeks. This is with a major boost from fresh interest in non-traditional stores of value (crypto and crypto derivatives). However, it is important to note that the rally won’t happen in a vacuum

Interest rate decisions from the Federal Reserve, inflation readings and ongoing macroeconomics will all play a part in how strong (and how long) any crypto gains will be.

Overall, how the Federal Reserve responds will affect the US dollar in one way or another. By extension, crypto is expected to react more strongly to the Fed’s decisions from here on out.