What is the "One Big Beautiful Law"?
It is a law, this law that allows the United States to increase its credit limit by the astonishing amount of $5 trillion. This means the government can borrow much more money. Although at first glance it seems purely a government matter, it raises several key questions in the financial world:
* More Inflation? When a government spends or borrows large sums of money, there is concern that the existing currency may devalue. If there are more dollars in circulation, each dollar could be worth less, which is known as inflation.
* What About the Dollar? A devaluation of the dollar could lead investors to seek other options for storing their money.
* Fiscal Sustainability: Is it sustainable for a country to keep increasing its debt at this pace?
How Does This Affect Cryptocurrencies?
This is where the relationship with cryptocurrencies comes into play, even if it is not explicit in the law:
* Protection Against Inflation: Many people see Bitcoin (BTC) as a "digital gold" or a "hedge against inflation." Unlike traditional money that governments can print without limit, Bitcoin has a fixed supply. There will only ever be 21 million Bitcoins. This scarcity makes it attractive when there are concerns about the devaluation of fiat currencies (like the dollar). If the dollar loses value, a scarce asset like Bitcoin could maintain or even increase its value.
* Seeking Alternatives to the Traditional System: Uncertainty about government debt and the strength of the dollar may lead investors to seek alternatives outside the traditional financial system. Cryptocurrencies, due to their decentralized nature, offer a different option.
* Stablecoins: Even stablecoins, which are cryptocurrencies designed to maintain a stable value (generally pegged to the US dollar), could be affected. If confidence in the dollar weakens in the long term, there could be a debate about their future, although for now they remain fundamental for operating in the crypto world.
Strength or Uncertainty?
For the cryptocurrency market, the "One Big Beautiful Law" can be viewed in two ways:
* Strength Argument: Many believe this law strengthens the argument for the adoption of cryptocurrencies. The idea is that as governments increase debt and inflationary concerns arise, cryptocurrencies offer a robust and decentralized alternative.
* Uncertainty Argument: Others may argue that overall economic uncertainty could lead investors to be more cautious, which could generate volatility in all markets, including the cryptocurrency market.
In summary, the "One Big Beautiful Law" does not mention cryptocurrencies, but the concerns it raises about the traditional economy — such as inflation and debt sustainability — make many see digital assets like Bitcoin as an increasingly relevant option for protecting value.