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 SpeakerJohnson, as cited by RapidResponse47, the U.S. Congress is implementing the largest federal spending cut in at least 30 years, reducing over $1.5 trillion from the budget. This significant fiscal tightening is likely to influence traditional financial markets, with potential positive implications for cryptocurrency assets as investors may seek alternative stores of value. Traders should monitor market volatility and capital flows into crypto, as fiscal policy shifts can affect risk appetite and liquidity across asset classes (Source: RapidResponse47 on Twitter, May 25, 2025).