The $2,000 tariff dividend proposal by Trump would see a second Bitcoin bull run that is liquidity-driven as the price rises to new all-time highs in 2025.
Bitcoin (BTC) is hitting new all-time highs with a recent gain of over $125,000 in the market due to numerous stimuli driving the market towards the bullish side.
The sudden spike has been fueled by the expectation of a $1,000 to 2,000 so-called tariff dividend stimulus suggested by President Donald Trump.
Rebates to be handed out to distribute revenues on tariffs, which may be over $1 trillion a year. Such a move is a reminder of the 2020 COVID-19 stimulus check that caused significant crypto and stock market booms.
The offer comes at a time when there is political and economic uncertainty, such as the current shutdown of the U.S. government and speculations of interest rate reductions by the Federal Reserve.
All of them are undermining the dollar and promoting investment in other assets like Bitcoin.
Spot ETFs and custody platforms have institutional investors investing more and more money in Bitcoin, further restricting supply options and driving prices up.
Stimulus-Induced Liquidity May Amplify Bitcoin Demand
According to analysts, the tariff dividend checks planned by Trump might serve as another liquidity catalyst, which will increase household spending and risk-taking assets such as Bitcoin.
Traditionally, higher liquidity inflows in the retail sector after the release of stimulus checks have caused a quick increase in prices in the crypto market.
The fact that the present environment is already enjoying more developed institutional infrastructure, such as ETFs and more coherent regulations, adds to the prospective stimulus-driven demand.
With Bitcoin approaching record prices, on-chain data reveals that there is a rapid decrease in the number of Bitcoins held on exchanges, which means that there is less pressure to sell, and the asset is more scarce.
Combined with tariff-subsidized stimulus money, anticipated Fed rate cuts, and the growing geopolitical anxiety, it is forming a kind of perfect storm of Bitcoin price growth.
But others warn of the sustainability of the rally because of leveraged trading and trend following.
