Short-Term Bitcoin Outlook Amid U.S Fiscal Developments
Despite the current wavering short-term outlook on Bitcoin, all is not gloom with the popular cryptocurrency. Bitcoin’s current price is fluttering around the $105,000 mark, offering a seemingly grim short-term perspective. On the other hand, the fiscal image in the United States projects a significantly more optimistic tone.
September 2025 U.S. Treasury Revenue Surges
The U.S. Treasury department reported in September 2025, a surplus amounting to approximately $198 billion. This profit is the most considerable surplus ever recorded for the month of September since tracking begun. This robust fiscal performance, in no small measure, helped shrink the 2025 fiscal deficit to a reduced $1.78 trillion. This slash is about $41 billion or an equivalent of 2.2% less than the previous year, 2024.
While it’s not unusual for September to witness a fiscal surfeit due to reasons tied to tax payments, an additional critical element played a pivotal role this time around—import duties, commonly referred to as tariffs. These tariffs, which President Donald Trump initiated in April, were instrumental in this observed fiscal surplus.
Impact of Import Tariffs on Revenue
The tariffs implemented by the Trump administration were equally profitable, pushing in a remarkable $30 billion in revenue. This impressive figure is almost half of what was originally forecasted for the entire fiscal year. The resultant revenues played a significant role in offsetting the colossal interest payments tied to the national debt of $38 trillion, yielding a record high of over $1.2 trillion annually.
Interest Payments and Federal Outflows
In September, the cumulative interest payments amounted to a staggering $37 billion. Consequently, this statistic became the fourth-largest federal expense for that month. The expenses included payouts for Social Security, amounting to $133 billion, health expenditures ($94 billion), and funding catered towards national defense($76 billion).
Impact of Trump’s Policies
The unexpected bumper revenue drawn from Trump’s tariffs implies a high likelihood of commitment to the trade war strategy amidst potential market volatility risks. This plausible scenario could motivate investors to transition from risk assets, seeking safe haven in markets such as bonds and gold, reflecting the market reaction during the April tariff upheavals.
Implications on Inflation and Interest Rates
While it’s plausible to assume a worsening trade war could potentially fuel inflation, the Federal Reserve’s expectation is that any likely price surges would be short-lived. The Federal Reserve also remains steadfast in continuing with interest rate reductions, currently ranging between 4.00% – 4.25%. The market anticipates interest rate cuts equivalent to 50 Basis Points (bps) for 2025. This adjustment would effectively bring the base interest rate down to between 3.50%-3.75%. The market awaits to see if the forthcoming easing will provide the desired respite to risk assets.
In conclusion, while bitcoins might be going through a rough patch, the fiscal activities in the United States are sure to create some ripple effects in the world of Bitcoin and cryptocurrency in general. Amidst the promise of the fiscal surplus and the prospect of trade wars, Bitcoin might surely find some footing sooner rather than later.
