Trump’s $2.4 Trillion Budget Bill Sparks Debt Fears, Boosts Bitcoin Safe-Haven Appeal

A controversial new budget proposal from the Trump administration has reignited concerns on Wall Street, as projections reveal it could add $2.4 trillion to the national deficit. While the bill promises tax relief and fiscal discipline, rising bond yields and widening deficits have investors questioning America’s long-standing financial resilience.

A Costly Economic Gamble

The One Big Beautiful Bill Act, passed by the House in May and now awaiting Senate approval, introduces sweeping tax breaks on overtime, tips, and senior benefits. While the administration insists this will fuel economic growth, the nonpartisan Congressional Budget Office (CBO) estimates the plan will increase the deficit by $2.4 trillion over the next decade.

The math is simple: the bill slashes $1.3 trillion in federal programs, but tax breaks cost $3.7 trillion, leaving a gaping shortfall. The result? More borrowing, more debt, and an estimated $551 billion in added interest payments.

Wall Street Grows Wary

Investor sentiment took a hit after the bill’s passage, with stock indices dipping and bond yields surging. Yields on 30-year Treasuries broke past 5% for the first time since late 2023. According to Vincent Liu, CIO at Kronos Research, this milestone is more than a statistic—it's a warning.

“Interest payments are now one of the fastest-growing line items in the federal budget, and as a share of GDP, they’re closing in on historic highs. That means more taxpayer dollars are going to service debt, not invest in the future,” Liu explained.

The bill's timing is especially concerning as borrowing costs rise across the board, from mortgages to credit cards. Combined with weak demand at recent Treasury auctions, markets are signaling a loss of patience with unchecked U.S. spending.

Global Ripple Effects and Safe Haven Shifts

These developments aren’t confined to the U.S. Analysts say rising U.S. debt can pressure global borrowing costs and destabilize emerging markets heavily exposed to dollar-denominated debt.

With confidence in traditional safe havens wavering, investors are reconsidering their strategies. Bitcoin, often dubbed "digital gold," is reemerging as a possible hedge.

“Bitcoin might shine in that uncertainty,” Liu noted. "But altcoins could face tougher headwinds as investors grow more cautious."