Experts warn that indirect economic measures like tax cuts could have a softer impact on cryptocurrency prices compared to direct stimulus payments.
The crypto market saw a brief weekend rally after President Trump’s announcement of a “tariff dividend” for low-income Americans. Traders quickly interpreted it as a sign of possible stimulus checks — a scenario reminiscent of the 2020–2021 crypto bull run. However, recent remarks from Treasury Secretary Scott Bessent have tempered those expectations, suggesting that the so-called dividend may instead take the form of tax cuts rather than direct cash transfers.
Tariff Dividend Explained
Speaking on a U.S. television interview, Bessent stated that the proposed $2,000 dividend could appear through several indirect mechanisms tied to the administration’s economic policy. “It could be just the tax decreases that we are seeing on the president’s agenda — no tax on tips, no tax on overtime, no tax on Social Security, and deductibility on auto loans,” he said.
These measures indicate a shift toward long-term fiscal relief rather than short-term stimulus. Unlike direct checks, tax cuts spread benefits over time, meaning that consumers may not feel the immediate financial boost that typically drives quick spending or speculative investment in assets like bitcoin.
Impact on Bitcoin and Altcoins
Following the President’s initial statement, bitcoin surged past $106,000, with major altcoins gaining between 8% and 25%. Yet, the momentum faded once investors realized that no direct cash distribution was confirmed. According to market analysts, this reflects a simple reality: “A bird in the hand is worth two in the bush.”
Direct checks deliver immediate liquidity, fueling both consumer spending and speculative markets. In contrast, tax reductions tend to have a delayed and diluted impact, particularly in a high-interest-rate environment where risk appetite is already constrained.
While comparisons to 2021 are tempting, today’s macroeconomic environment is far different. Interest rates hover around 4%, and inflation remains above the Federal Reserve’s 2% target, leaving less room for aggressive risk-taking.
Experts note that whether Americans receive direct payments or indirect tax relief will determine crypto’s next move. If funds flow directly into households, a renewed bullish wave could follow. If delivered through gradual tax adjustments, the crypto response is likely to remain subdued.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.