June 2025 Macro Shift: Why Global Fiscal Expansion Signals Bullish Territory for Bitcoin

June 2025 has delivered a fascinating macroeconomic cocktail that crypto investors need to understand. Across the globe's three largest economies, we're witnessing a synchronized pivot toward fiscal expansion combined with accommodative monetary policy—a combination that historically creates the perfect environment for Bitcoin and digital assets to thrive.

The United States: Deficit Spending Continues Despite Revenue Gains

The latest Treasury data shows the U.S. government deficit hit $316 billion in June 2025, demonstrating persistent government spending despite a $48 billion increase in revenues. This continued deficit spending is crucial for crypto markets because it represents net money creation flowing into the private sector.

Key spending increases included:

• Social Security outlays: +$10 billion
• Veterans Affairs: +$8 billion
• Medicare: +$7 billion
• Mortgage loan programs: +$17 billion

While revenue increased through higher individual income taxes (+$17 billion) and customs duties (+$17 billion), the government maintained its deficit stance. This means new money continues entering the economy through government spending channels, providing the foundational liquidity that often finds its way into risk assets including Bitcoin.

China's Massive Fiscal Stimulus: 5.66 Trillion Yuan in Play

China's 2025 fiscal policy represents perhaps the most significant global liquidity injection we've seen. The government has increased its deficit-to-GDP ratio to 4%, targeting a total deficit of 5.66 trillion yuan (approximately $790 billion). This represents a massive injection of new money into the global economy.

Critical components include:

• Local government special-purpose bonds: 4.4 trillion yuan (+500 billion from 2024)
• Infrastructure spending allocation: Over 5 trillion yuan
• Ultra-long special treasury bonds: 1.3 trillion yuan for strategic initiatives

For crypto markets, China's fiscal expansion is particularly bullish because it creates yuan-denominated liquidity that often flows into dollar-denominated assets as Chinese investors seek alternatives. Even with capital controls, this massive liquidity creation finds ways to influence global risk asset demand.

Eurozone's Double Stimulus: Rate Cuts Plus Fiscal Expansion

The European Central Bank delivered a 25 basis point rate cut in June 2025, bringing the deposit rate to 2.25%. Simultaneously, the Eurosystem projections indicate significant fiscal loosening driven by increased defense and infrastructure spending, particularly in Germany.

This dual stimulus approach—lower rates plus higher government spending—represents the ideal macroeconomic environment for Bitcoin. Lower rates reduce the opportunity cost of holding non-yielding assets like Bitcoin, while fiscal expansion provides the actual liquidity that can flow into crypto markets.

The Interest Rate Paradox: Why Cuts Signal More Liquidity

Conventional wisdom suggests higher rates hurt crypto, but the liquidity mechanics work differently. When central banks cut rates, they signal two things: first, that economic conditions warrant accommodation, and second, that they're willing to support asset markets. For Bitcoin, the key isn't the rate level but the direction of policy and its impact on overall financial conditions.

The Fed's maintenance of the 4.25-4.50% range while other central banks cut suggests a potential divergence that could strengthen the dollar initially, but the global trend toward accommodation is clear.

Bank Credit: The Hidden Engine of Money Creation

While government spending provides base money, bank credit creation is equally crucial for crypto markets. US mortgage debt reached $12.80 trillion across 85.78 million mortgages, with $430 billion in new originations in Q1 2025 alone. This credit expansion creates new bank deposits—the primary form of money that individuals and businesses actually use.

The 20% year-over-year increase in loans to non-bank financial institutions (NBFIs) to $1.2 trillion is particularly significant. These institutions often bridge traditional and crypto markets, providing another channel for newly created money to find its way into digital assets.

Market Implications: Why This Setup Favors Bitcoin

The current macroeconomic environment presents several bullish factors for Bitcoin:

Liquidity Creation: Government deficit spending in the US, massive fiscal stimulus in China, and Eurozone expansion all create new money that seeks returns in risk assets.

Inflation Hedge Demand: With central banks cutting rates while governments spend heavily, real interest rates are falling, making non-yielding stores of value like Bitcoin more attractive.

Currency Debasement: The synchronized global move toward fiscal expansion suggests coordinated currency debasement, exactly the scenario Bitcoin was designed to hedge against.

Financial Repression: As real yields turn negative across major economies, investors increasingly seek alternatives to traditional savings vehicles.

Strategic Considerations for Crypto Investors

This macroeconomic backdrop suggests crypto investors should focus on:

1. Timing Considerations: The lag between fiscal spending and market impact typically runs 6-12 months, suggesting positive momentum for crypto markets into early 2026.

2. Geographic Flows: Watch for Chinese capital finding indirect routes to crypto markets as domestic liquidity expands.

3. Credit Cycles: Monitor commercial real estate loan maturities and refinancing activity as indicators of banking sector health.

4. Currency Dynamics: Dollar strength could temporarily pressure crypto, but the underlying liquidity trends favor digital assets over the medium term.

Conclusion: A Macro Environment Built for Digital Gold

June 2025's macroeconomic developments represent a textbook example of the conditions that historically favor Bitcoin adoption and price appreciation. When governments increase deficit spending while central banks maintain accommodative policies, the resulting liquidity creation and financial repression typically drive investors toward alternative stores of value.

The synchronized nature of this global stimulus—from America's continued deficit spending to China's trillion-yuan fiscal expansion to Europe's dual rate cut and spending surge—creates a powerful tailwind for crypto markets. For investors positioned correctly, this macro environment offers the type of fundamental support that can drive sustained bull market conditions in digital assets.

The key insight for crypto investors is recognizing that money creation—not just money printing—drives liquidity, and liquidity ultimately drives asset prices. With the world's major economies all choosing the path of fiscal expansion, Bitcoin stands positioned to benefit as the premier digital store of value in an era of coordinated currency debasement.