Bitcoin’s price skyrocketed to $116,000, driven by institutional capital inflows, expansive U.S. fiscal policy, and tightening Federal Reserve liquidity measures. The cryptocurrency’s rally underscores its strengthening position as a macro-economic hedge amid shifting financial conditions.
The surge follows recent passage of the $3.3 trillion Big Beautiful Bill, which raised the U.S. debt ceiling by $5 trillion while extending tax cuts. This fiscal expansion introduced $410 billion in new debt and catalyzed Bitcoin’s 6% price jump.
Concurrently, the Federal Reserve tightened market liquidity by reducing its balance sheet by $13 billion, bringing reserves down to $6.66 trillion—the lowest level since April 2020. This monetary contraction amplified Bitcoin’s appeal as an alternative asset.
Significant inflows into Bitcoin ETFs highlighted institutional adoption, with analysts noting Bitcoin’s emergence as a primary beneficiary of evaporating liquidity in traditional fixed-income markets. Enhanced risk appetite across financial markets further boosted cryptocurrencies, evidenced by the S&P 500’s 30% rally since April.
Ethereum gained 14% to approach $3,000, while other major tokens including Solana and Avalanche registered substantial upward momentum in the broad-based crypto market advance.