This Recent Clash Reveals a Key Crypto Tailwind

Dear Subscriber,

President Trump’s “Big Beautiful Bill” slashes taxes, boosts spending and lifts the debt ceiling by more than $5 trillion.

It’s precisely the kind of fiscal blowout Elon Musk has spent years railing against.

Because of this, a clash was only a matter of time.

This is more than a tabloid spat between towering personalities. It’s an epic collision between Washington’s permanent deficit reality … and Musk’s tech-savvy, “sound-money” brand.

Once you grasp why U.S. deficits are all but untouchable — and turbocharge the Federal Reserve’s printing press — this clash seems pre-destined.

And it spells more tailwinds for crypto.

Why Musk Finally Broke with Trump

The “Big Beautiful Bill” blows out the federal budget deficit. It extends Trump’s 2017 tax cuts, adds new deductions and piles on fresh outlays for the military and immigration enforcement.

The Congressional Budget Office says this will add $2.3 to $5 trillion to borrowing over the next decade.

Senate Republicans have already pushed to raise the bill’s debt-limit sweetener from $4 to $5 trillion.

These are just the facts. And I am not passing judgement on the various provisions in this bill.

And it’s a fact Musk’s reaction to the “Big, Beautiful Bill” was swift and loud. He blasted the package as a “disgusting abomination” that would push the annual deficit past $2.5 trillion.

He declared America’s $36 trillion national debt “unsustainable,” saying it puts the nation on a path to bankruptcy.

And before long, his strident opposition morphed into a multiday feud with the White House — forcing allies on both sides to scramble to calm the markets.

Structural Reality: Washington Cannot Cut Its Way to Balance

Look, like it or not, every dollar Uncle Sam borrows flows straight into private-sector income and bank deposits. Yank that spending away, and you punch a hole in aggregate demand, ushering in recession.

That shrinks tax receipts and swells safety-net costs. Result: the deficit actually goes up — not down.

Europe tried to do exactly that post-Global Financial Crisis austerity. And growth flatlined. Budgets didn’t balance … at all.

Now, even Brussels is junking the fiscal-rules playbook under the banner of “defense spending.”

Trump remembers 2018, when a brief Fed tightening and modest budget restraint sent markets into a tailspin. He’s not going to risk that again.

Any president proposing deep entitlements cuts would torch his own approval rating (and his party’s). Hence, promises of restraint have a way of vanishing once in office.

What It Means for Crypto

But for crypto investors, this perma-deficit is actually a boon.

The chart below shows how closely public debt and Fed money printing move together.

It’s critical to understand the reason the Fed has been printing so much money since 2008. Washington’s response to the Global Financial Crisis was a spending orgy so epic … that once it got going, it was impossible to stop!

Today, this is just a fiscal fact of life in Washington. And that isn’t going to change with this administration. Or the next.

And the Fed — despite its tough talk about inflation — will always ride to the government’s rescue.

Each new round of debt monetization erodes fiat purchasing power. And chases capital into scarce assets: gold, and especially crypto.

For a decade, Bitcoin’s correlation with global liquidity has been 90% plus. And liquidity is projected to keep rising into August before any meaningful pause.

So, at the end of the day, Musk’s sound-money instincts could never peacefully coexist with Washington’s spend-now-print-later model, which is baked into the math of modern American finance.

Trump cannot cut — politically or economically — so deficits will balloon. Forcing the Fed to eventually monetize.

For crypto investors, the upshot is clear: it’s long-term bullish.

Musk may not like the way the game is played. But we already know who the winners will be:

Bitcoin and those who hold it.

For now, BTC is still below its recent all-time highs. So, for any investor looking to increase their exposure, this could be seen as a buying opportunity.

Best,

Juan Villaverde