Stimulus Shock: 2020’s Boom, 2022’s Bust – What’s Next? 🚀

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Key Takeaways: A Symphony of Speculation and Sorrow

What’s Driving the Recent Crypto Rally? A Mosaic of Monetary Magic and Muddled Metrics 🎩💰

A $440 billion stimulus, Fed rate cuts, and the illusion of controlled inflation have coaxed bullish short-term positioning, inflating the crypto market cap like a balloon in a hurricane 🧨.

Are There Risks Ahead for Investors? A Labyrinth of Inflation, Debt, and Tariff Tedium 💸📉

Rising inflation, the ever-growing U.S. debt, and the meager tariff revenue could orchestrate a 2022-style pullback into 2026, a financial waltz of despair 🌀.

The U.S. economy, that fickle lover, is finally brushing off its cobwebbed boots and wobbling back to life 🦄. After nearly 40 days, the government shutdown is finally getting lifted. And, right on cue, this came shortly after President Trump posted about a $2,000 “tariff dividend” for Americans, excluding higher-income brackets. 

From there, the crypto market didn’t wait around. 

It pirouetted upward by 40%, catapulting the total market cap to a staggering $3.57 trillion 💸✨. But the bigger question is what this means going forward. Is stimulus really the core engine driving crypto’s momentum into late 2025 and 2026? 🤔

Capital Flows Surge as Stimulus Boosts Risk Assets: A Tale of Two Bulls 🐂

Short-term crypto investor positioning has morphed into a veritable bull market, as if the market itself had donned a party hat 🎉.

From a macro perspective, this move isn’t random. The stimulus check lands in a relatively stable spot, supported by “softer-than-expected” data, such as inflation remaining under control despite ongoing tariffs.

Add the Fed’s easing cycle, with two rate cuts already in play, and the liquidity backdrop transforms into a lush garden for risk assets 🌱. Bottom line, crypto investors are pricing in that the stimulus will fuel capital flows, like a gambler betting on a roulette wheel 🎲.

From a technical angle, analysts, those modern-day alchemists, foresee a $440 billion stimulus on the horizon 🧪.

Based on the chart above, there are roughly 220 million U.S. adults who meet the income criteria, with the top 15% excluded as “high income”. That works out to roughly 220 million × $2,000, or $440 billion in payouts.

Against this backdrop, crypto enthusiasts were quick to draw parallels with the 2020 COVID stimulus cycle and the 2021 bull run. That said, analysts still advise caution. So, is the long-term crypto positioning still in limbo? 🌀

Crypto Bulls Face Headwinds from Stimulus and Debt: A Tragicomedy 🎭

The 2020 stimulus cycle, a harbinger of both euphoria and despair, later unfurled during the 2022 bear market 🌀.

For context, back in 2020, the U.S. government rolled out three rounds of stimulus checks to boost liquidity, totaling over $814 billion.

The result? These payouts fueled a bullish rally, pushing the crypto market up 180%+ 📈. That said, as the Kobeissi Letter cautions, the influx of liquidity ignited a massive inflation cycle, sending the U.S. inflation index to 9% by June 2022, which in turn triggered the crypto market’s 70% annual drop 📉.

In short, the long-term impact of the stimulus could be bearish for crypto, like a gloomy forecast from a weatherman who’s never been outside 🌧️.

That said, the question is, will the tariffs offset some of this pressure?

In August 2025, the U.S. collected a mere $30 billion in tariff revenue, while the deficit ballooned to $345 billion, leaving tariffs to cover a paltry 10% of the shortfall 💸📉.

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2025-11-10 15:19