Bitcoin reached an all-time high of $116,000 on July 10th, just 6 days after Donald Trump signed the Big Beautiful Bill into law. This representative cryptocurrency has risen 6% since the bill's signing, with Ethereum and other altcoins following suit.
This rally occurred amid macroeconomic changes, increasing US debt, bond market tightening, and historic ETF inflows.
Fiscal Surge, Moving to Real Assets
Trump's $3.3 trillion Big Beautiful Bill was signed on July 4th, immediately increasing US debt by $410 billion. The bill raises the debt ceiling to $5 trillion and permanently extends major tax cuts.
The market sees this as an inflationary factor. Investors are moving from bonds to scarce assets like Bitcoin. The bill's scale and execution speed have amplified concerns about fiscal discipline.
Bitcoin is re-emerging as a hedge against fiat currency value decline due to its fixed supply.
BlackRock's spot Bitcoin ETF (IBIT) now manages $76 billion in assets, tripling in size from 200 trading days ago.
In comparison, the largest gold ETF took over 15 years to reach the same milestone. Institutional fund flows are now a powerful driver of price movements, deeply embedding Bitcoin into mainstream portfolios.
Federal Reserve Balance Sheet Reduction, Liquidity Tightening
In June, the Federal Reserve reduced its balance sheet by $13 billion to $6.66 trillion, the lowest since April 2020. The Fed has reduced its assets by over $2.3 trillion in the past three years.
During the same period, Treasury holdings decreased by $1.56 trillion. With fewer bond buyers and more debt issuance, investors are moving to alternative value storage methods.
Bitcoin has become the top candidate.
BREAKING: The Federal Reserve's balance sheet declined by -$13 billion in June, to $6.66 trillion, the lowest since April 2020.
— The Kobeissi Letter (@KobeissiLetter) July 10, 2025
Over the last 3 years, the Fed has reduced its asset holdings by -$2.31 trillion, or -26%.
During this period, the value of Treasury holdings has… pic.twitter.com/OGAVR5wjUd
Additionally, Ethereum is trading near $3000 and has risen 14% since the Big Beautiful Bill was enacted. Solana, Avalanche, and other altcoins are also rising.
Retail and institutional capital are returning. Meme coins and DeFi tokens are gaining attention as speculative sentiment returns. Cryptocurrencies are again leading the risk preference cycle.
S&P500 at All-Time High... Overall Risk Preference
The S&P 500 has risen 30% since its April 2025 low, reaching a new all-time high this week. This signals strong investor confidence in high-growth, high-risk assets.
Bitcoin directly benefits from this environment. Stocks tend to rise, and cryptocurrencies follow. The market views the Big Beautiful Bill as an indirect stimulus and is responding accordingly.
Key Points
Bitcoin's new all-time high can be interpreted as a response to structural changes. The Big Beautiful Bill passed last week in the US expanded the deficit and shook confidence in the US debt market.
With growing inflation concerns and increasing institutional access, Bitcoin is becoming a macro hedge choice. As cryptocurrencies enter a new bull market, all eyes are now on the Federal Reserve and its interest rate reduction decisions.
