According to an analyst, Bitcoin is being positioned as a primary defense against the U.S. financial crisis, alongside gold, and may be one of the main factors driving its current recovery.
Bitcoin (BTC) reached a new high on Monday (July 14), breaking through $121,000, “but this recovery is not driven by speculation; it is propelled by deeper factors,” said Markus Thielen, head of research at 10x, in a report shared with Cointelegraph.
Thielen stated that Bitcoin has transformed from a technological story into a macro asset, particularly a hedge against the U.S. government's fiscal irresponsibility.
“The narrative has completely changed: no one is talking about blockchain use cases or Bitcoin's technological promise anymore,” Thielen said, adding, “Bitcoin has become a macro asset, a hedge against reckless deficit spending.”
U.S. President Trump's “One Big Beautiful Bill” (OBBBA) passed in July, raising the debt ceiling by $5 trillion, the largest single increase in U.S. history.
The bill's promised $2 trillion deficit reduction could increase the federal deficit by $2.3 trillion to $5 trillion over the next decade. This has led to a potential fluctuation of $7 trillion from initial expectations, Thielen noted.
With no signs of slowing deficit spending and monetary policy becoming more accommodative through anticipated interest rate cuts, Bitcoin is positioned as the “ultimate beneficiary” of this macro environment, he said.
“This is not just another cryptocurrency recovery; it is a direct response to the faster-than-expected deterioration of the U.S. fiscal situation,” he stated.
“Alongside gold, Bitcoin is now positioned as a primary defense against the impending fiscal crisis — and this crisis is rapidly escalating.”
The analyst pointed to several upcoming events as market catalysts.
Key legislation will be reviewed in Washington, D.C., during what is being called “Crypto Week.”
Lawmakers are expected to discuss and possibly vote on three high-profile bills: the CLARITY Act, which provides regulatory oversight for the crypto market; the GENIUS Act, which creates a framework for stablecoins; and the anti-CBDC surveillance national bill.
Trump's Digital Assets Working Group will also release a crypto policy report on July 22, which may include strategic Bitcoin reserve proposals.
A Federal Reserve meeting is also scheduled for July 30, where interest rate cuts are expected. However, the CME futures market still predicts a 93% probability that rates will remain unchanged.
“As the U.S. prepares for Crypto Week to discuss key legislation, cryptocurrencies remain resilient despite stock market volatility caused by geopolitical tensions and tariff concerns,” said Eugene Cheung, Chief Business Officer of crypto platform OSL, in an interview with Cointelegraph.
He predicts that the asset could reach $130,000 to $150,000 by the end of the year.
“Bitcoin breaking through $120,000 is not just a milestone; it signifies that digital assets have deeply rooted themselves in institutional portfolios,” added Rachael Lucas, an analyst at Australian crypto exchange BTC Markets.
Meanwhile, Nick Ruck, Director of Research at LVRG, told Cointelegraph, “We expect altcoins to continue following Bitcoin's trend as traders diversify their portfolios and take on more risk.”
Related: The Fragile Boundaries of Decentralization: DeFi Concerns Behind the GMX Exploit
Original article: “Analyst Says Bitcoin (BTC) Rises Due to U.S. Deficit Concerns, Not Speculation”
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