$ETH Let's learn about the 'Too Big to Fail' Act and its impact on the market!
🔶 The 'Too Big to Fail' Act generally refers to the 'Too Big to Fail' Tax and Expenditure Act. On July 1, 2025, local time, the U.S. Senate passed the act with a vote of 51 in favor and 50 against, and it has now returned to the House of Representatives for review.
🔸 Defense Spending: The U.S. government will allocate an additional $150 billion, with most funds used to develop unmanned combat systems, including suicide drones and unmanned aerial vehicle systems.
🔸 Taxation and Social Welfare: The act extends the corporate and individual tax cuts passed by Trump during his first term in 2017, allowing tip and overtime pay income to be exempt from taxation.
🔸 Immigration and Debt: It authorizes the provision of hundreds of billions of dollars to combat illegal immigration. It raises the U.S. debt ceiling by an additional $500 billion, and it is estimated that from 2025 to 2034, this act will increase the U.S. deficit by nearly $3.3 trillion.
🔸 Energy Policy: The act stipulates that the U.S. will no longer provide tax credits for electric vehicles starting September 30, 2025, and only wind and solar projects that go into production before the end of 2027 will enjoy tax credits.
🔶 Although the act does not directly mention cryptocurrencies, it may have the following impacts on the crypto space:
🔸 Changes in Liquidity Expectations: The act includes $5 trillion in debt expansion and tax reduction policies, which may force the Federal Reserve to cover the enormous debt, leading to increased market bets on interest rate cuts. Fiscal stimulus accompanied by expectations of monetary easing may attract funds into the crypto market, driving up coin prices.
🔸 Increased Demand for Stablecoins: The remittance tax clause in the act may raise the cost of cross-border fund flows, which could lead to a surge in the demand for stablecoins like USDT as a safe haven, further boosting the market capitalization of stablecoins.
🔸 Migration of Safe-Haven Funds: If the final list of tariffs proposed by Trump against China is implemented as planned in mid-July, it may trigger market risk aversion, causing some funds to migrate to cryptocurrencies like Bitcoin, pushing their prices upward.
