The cryptocurrency market lit up on Sunday, with social media erupting in cheers as users hoped for new bull runs in Bitcoin (BTC), XRP, and DOGE. The surge was fueled by excitement over stimulus checks, following President Donald Trump’s announcement on Truth Social of a tariff dividend for low-income Americans.
However, the reality, as Treasury Secretary Scott Bessent later clarified, is more complicated. Bessent explained that the President’s tariff dividend might be delivered through tax cuts from his major economic policy bill earlier this year.
“The $2,000 dividend could come in lots of forms, in lots of ways. It could be just the tax decreases that we are seeing on the president’s agenda: no tax on tips, no tax on overtime, no tax on Social Security deductibility on auto loans,” Bessent told ABC’s *This Week* when asked about Trump’s social media post.
These indirect measures, as Bessent emphasized, may not trigger the same immediate surge in Bitcoin, altcoins, or consumer spending as direct stimulus checks typically do. That’s because stimulus checks provide quick, tangible cash inflows that can rapidly boost demand, while tax cuts tend to distribute benefits more gradually.
As the saying goes, a bird in the hand is worth two in the bush—the certainty of direct cash inflows generally carries more immediate market impact than the uncertain promise of indirect measures.
Bessent’s clarification followed euphoric assumptions that the announced dividend would come in the form of stimulus checks, drawing parallels to the COVID-era payments that were closely linked to unprecedented rallies in cryptocurrencies, particularly altcoins. This narrative lifted market valuations.
Bitcoin rallied from roughly $103,000 to $105,000 on Sunday and extended gains to over $106,500 at one point during Monday’s Asian trading hours. The leading cryptocurrency gained 4% in the past 24 hours, with altcoins such as XRP, WLFI, PUMP, UNI, and ZEC rising between 8% and 25%, respectively. The CoinDesk 20 Index increased by over 5% to 3,469 points.
However, the rally stalled around 8:00 AM UTC.
It’s also worth noting that drawing parallels with 2021 doesn’t quite hold up. Back then, inflation was well below the Federal Reserve’s 2% target, and interest rates were pinned near zero—both factors encouraging increased risk-taking and market exuberance. Today, rates stand around 4% following recent hikes, and inflation remains at least a full percentage point above the Fed’s target.
This raises a crucial question: whether recipients of the tariff dividend—whether through direct payments or indirect measures like tax cuts—will channel those funds into crypto trading or choose to save them instead.
https://bitcoinethereumnews.com/bitcoin/attention-bitcoin-btc-bulls-trumps-tariff-dividend-might-skip-direct-stimulus-checks/