US Fiscal Stimulus and Easing Expectations Trigger Strong Market Reactions: Analyzing the Logic Behind Bitcoin's New High

Recently, the US Congress passed a massive fiscal stimulus package, accompanied by an increase in the US debt ceiling and gradually rising expectations for interest rate cuts, leading to a clear loosening of market liquidity. Meanwhile, the Trump administration's Treasury General Account (TGA) experienced a substantial influx of funds, effectively releasing a large amount of liquidity and marking the official start of a period of significant monetary expansion.

This is specifically reflected in the price of Bitcoin (BTC), which has hit a new historical high, surpassing the $110,000 mark. However, during the early morning hours, the market saw a large volume of sell orders, combined with previous observations of significant fund movements in wallets holding 80,000 BTC, indicating that there is still some selling pressure in the market. It is noteworthy that these large sell orders were quickly absorbed, demonstrating strong buying power and sufficient capital support.

After the Federal Reserve's latest meeting minutes were released, US Treasury yields fell significantly, and the expectation of a rate cut in September became a consensus, leading mainstream assets into a short squeeze. It is evident that the stimulating effect of rate cut expectations on the market even exceeds that of the actual rate cut actions themselves.

The passage of the “Big Fiscal Stimulus Bill” effectively amounts to “turning on the tap,” whether it is the lifting of the US debt ceiling or the policies of interest rate cuts and balance sheet expansion, the core is to release more monetary liquidity. The rapid expansion of the money supply will inevitably lead to increased pressure on currency devaluation and unavoidable inflation risks.

Not only Bitcoin but various asset classes in the global stock market are also showing a clear upward trend. The current macro environment is gradually evolving into a stagflation pattern reminiscent of the 1980s.

In anti-inflation strategies, mastering monetary tools is crucial, which is also the fundamental reason why stablecoins and digital assets are in high demand. Holding digital assets means possessing potential inflation hedging tools.

The US is expected to release a new round of historically high liquidity in August, but the effects of a loose monetary policy have a certain lag; currently, market funds have not yet fully entered, and significant volatility is expected in the coming weeks, accompanied by periodic sharp rises and falls, causing holders to be shaken out.

If the market performance in April this year is seen as the preliminary warm-up, then the market movements in August-September will become the real battleground. It is recommended that investors gradually build positions and buy on dips, preparing for the upcoming altcoin market.