According to The Kobeissi Letter, the US budget deficit has averaged 9% of GDP over the last five years, with the most recent 12 months alone seeing a budget gap of 7% of GDP, surpassing levels seen during the 2001 and 1980s recessions (source: The Kobeissi Letter, May 26, 2025). This persistent fiscal imbalance increases concerns about US debt sustainability and could drive volatility in the US dollar, which is highly relevant for crypto traders. Historically, large deficits and expanding government spending have led investors to seek alternative assets, such as Bitcoin and Ethereum, as a hedge against potential dollar depreciation and inflation. Traders should monitor capital flows and the correlation between US fiscal policy and crypto market performance, as further deficit expansion may support bullish momentum for major cryptocurrencies.

According to The Kobeissi Letter, the US budget deficit has averaged 9% of GDP over the past five years, with the most recent 12 months alone reaching a 7% deficit—surpassing levels seen during the 2001 and 1980s recessions (source: Twitter/@KobeissiLetter, May 26, 2025). For crypto traders, this persistent fiscal imbalance can drive increased interest in decentralized assets like Bitcoin and Ethereum as hedges against potential dollar devaluation and inflation. Historically, high deficits have contributed to concerns about monetary policy stability, often resulting in heightened volatility and trading opportunities within the cryptocurrency market.

According to The Kobeissi Letter, historical data shows that during previous US recessions, the federal budget deficit expanded by around 4% of GDP on average, which could mean an additional $1.3 trillion shortfall if a recession occurs in 2025 (source: The Kobeissi Letter, Twitter, May 14, 2025). This significant fiscal deterioration may pressure the US dollar and increase liquidity risks, factors that often drive volatility in the cryptocurrency market. Crypto traders should monitor US fiscal policy and macroeconomic developments closely, as increased deficit spending and potential monetary easing could impact Bitcoin and altcoin prices, as well as stablecoin demand.

According to The Kobeissi Letter, the US budget deficit decreased by $76 billion year-over-year in March, reaching $161 billion, the lowest level in five years. This fiscal improvement is attributed to an 11% increase in government receipts, amounting to $368 billion, and a 7% decline in spending to $528 billion, as reported by ZeroHedge. Traders should note this development as it may influence fiscal policy decisions and market reactions.