Bitcoin Big Breakout? U.S. Policy Shift Ignites Hopes

As the United States moves toward ending its latest partial government shutdown, the financial world is buzzing once again. This particular shutdown, one of the longest in recent American political history, has lasted 41 days, interrupting government services, delaying paychecks, and injecting uncertainty into both the economy and global markets. Now, with the U.S. Senate approving a Continuing Resolution by a vote of 60 to 40, the country is preparing to reopen government operations, pending official approval from the House of Representatives and the President. But this is not the only development capturing investor attention. At nearly the same moment, President Donald Trump announced a bold proposal referred to as the “tariff dividend”, a fiscal idea that suggests distributing $2,000 to every American citizen, alongside broader policy changes aimed at injecting liquidity into the economy. These two events combined have stirred anticipation that Bitcoin and other high-growth assets may be entering a new cycle of interest.

What makes this moment especially significant is Bitcoin’s historical behavior during similar periods. Following previous government shutdowns, Bitcoin surged — rising 96% after the February 2018 shutdown and a remarkable 157% after the January 2019 shutdown. While analysts caution that these moves were also influenced by wider market recoveries, the correlation is enough to make investors sit up and watch. In an economic landscape where uncertainty is frequent and inflation is persistent, Bitcoin has increasingly positioned itself as both a hedge and a high-risk speculative asset. Now, with the U.S. possibly preparing to pump fresh liquidity into the financial system, many market watchers believe Bitcoin could be approaching another major rally.

Shutdown Nears End, and Markets React Quickly

News of the Senate’s Continuing Resolution approval disrupted markets almost instantly. Stocks climbed, precious metals like gold and silver ticked upward, and Bitcoin gained new momentum, reinforcing the narrative that financial markets are extremely sensitive to government fiscal positioning. On prediction markets such as Polymarket, more than 90% of traders currently believe the shutdown will officially be resolved within the week. This level of confidence has boosted investor sentiment and redirected capital flows into assets favored during high liquidity periods.

Economist Peter Schiff, known for his critical views of the U.S. dollar, remarked that deficits and inflation are likely to rise, even with the government reopening. This suggests that investors may increasingly turn to alternative stores of value, especially as concerns about dollar stability resurface. Bitcoin has often behaved in ways that reflect investor skepticism toward traditional financial systems. Even if the shutdown itself is not the sole driver of future price movements, the reopening aligns with renewed liquidity outlooks, making the timing especially noteworthy.

What Previous Shutdowns Tell Us

While history is not always a perfect predictor, patterns matter in financial analysis, and Bitcoin’s behavior over the last decade provides useful context.

• After the February 2018 government shutdown, Bitcoin increased 96% within several weeks.
• Following the January 2019 shutdown, it surged 157%, climbing as markets regained confidence.

However, analysts emphasize that these rallies were not solely attributable to the shutdown itself. Broader global market recoveries, supportive monetary policy, and improving investor sentiment also played key roles. The current environment exhibits signs of similar pressures, but with notable distinctions:

1. Inflation rates today are significantly higher.
2. The U.S. national deficit is expanding at a faster pace.
3. Institutional adoption of Bitcoin is stronger than in 2019.

Because of these conditions, Bitcoin is being evaluated not just as a speculative asset but also as a potential hedge against currency devaluation. This dual role gives Bitcoin a unique advantage in markets where traditional assets are increasingly exposed to volatility. At the same time, it makes Bitcoin sensitive to fiscal decisions made by the U.S. government.

The “Tariff Dividend”

President Trump’s recently announced “tariff dividend” proposal stands out as one of the most attention-grabbing economic policy ideas of 2025 so far. Under this plan, every American citizen would receive $2,000, though the distribution format remains unclear. Some analysts believe it will take the form of direct payments, while others expect it to appear as tax credits, payroll tax adjustments, or a “no tax on tips” policy. The proposal also includes:

• 50-year mortgage options
• Reduced insurance subsidies
• Direct federal insurance payments

These measures signal a substantial fiscal expansion, potentially directing hundreds of billions of dollars into circulation. If this happens, a portion of that capital is likely to move into investment markets, including crypto. More liquidity in the financial system generally means:

• Higher consumer spending
• Increased investment activity
• Greater demand for speculative and emerging assets like Bitcoin

Investors who believe in Bitcoin’s long-term adoption narrative see this as a potential turning point, particularly after months of price stabilization around the $105,300 level.

Bitcoin’s Current Position

At present, Bitcoin trades near $105,300, holding steady despite increased selling pressure. This stability reflects a broader market belief that Bitcoin has entered a consolidation phase. Investors are watching for signals that indicate whether Bitcoin will:

1. Break out and begin a new upward rally, or
2. Enter a temporary correction, offering new accumulation opportunities.

One long-term market model focuses on a 65-month liquidity cycle, which suggests that the market may approach a peak in early to mid-2026. Some analysts interpret this to mean that Bitcoin could face a 15 to 20% correction before continuing higher. However, the exact timing and magnitude are uncertain, especially with fiscal policy now in flux. What is clearer is that Bitcoin is positioned in a zone where it is viewed simultaneously as:

• A safe store of value in the face of inflation,
• And a speculative asset capable of delivering high returns.

This dual identity makes Bitcoin particularly sensitive to economic policy changes like the shutdown resolution and the tariff dividend proposal.

The end of the U.S. government shutdown and the introduction of the tariff dividend proposal create a financial environment defined by rising liquidity expectations, shifting investor sentiment, and renewed interest in alternative stores of value. Bitcoin, historically responsive to such conditions, may be positioned for a significant price move, although timing remains uncertain. As policymakers work to finalize economic plans and restore government operations, markets will be closely watching liquidity signals, consumer behavior, and investment flows. For now, Bitcoin stands at a strategic crossroads. If fiscal support accelerates and liquidity increases, Bitcoin could enter a new growth phase reminiscent of its previous rallies. If these measures stall or shift, the market may undergo a short-term correction before the next accumulation cycle. Either way, Bitcoin remains an asset to watch closely, particularly as global financial conditions continue to evolve.

Disclaimer: CryptopianNews shares this for learning and info only. It’s not meant to be financial or investment advice. Crypto markets change a lot and move quickly. Investing in them can be risky. You should always look into things yourself. Talk to a trained financial advisor before making any choices about investing.