- Political and fiscal moves now sway crypto prices more than Bitcoin’s traditional four‑year cycle.
- Expansionary spending, suppressed real yields, and blurred monetary boundaries increase Bitcoin’s sensitivity to liquidity.
- Liquidity support via fiscal or administrative channels—“quasi‑QE”—is seen as a key driver of market timing.
- Regulatory progress in Washington, including a market‑structure bill and the CLARITY Act, has become a critical short‑term catalyst.
- Institutional ETF demand remains a structural support, but policy developments will shape institutional positioning.
Bitcoin’s price action in 2025 and expectations for 2026 are being shaped more by political and fiscal signals than by its historical halving cycle, analysts say. Markets rallied in equities during 2025 while Bitcoin lagged, suggesting investors now respond to liquidity expectations and policy timing rather than traditional on‑chain indicators.
Analysts point to pre‑election fiscal stimulus and blurred lines between fiscal, trade, and monetary policy as central drivers. A Full‑Year 2025 and Themes for 2026 report from Binance describes the backdrop as one of “financial repression” and says fiscal dominance and low real yields create a supportive environment for digital assets.
The report and market observers say heavy government spending and policy actions that keep borrowing costs low weaken sovereign debt dynamics and push investors toward alternatives like crypto. Analysts use the term “quasi‑QE” for liquidity support delivered through fiscal or administrative channels rather than formal central‑bank asset purchases.
Tiger Research senior analyst Ryan Yoon noted the link between liquidity expectations and price moves, saying, “Bitcoin reacts preemptively when markets expect quasi‑QE.” Market watchers also highlight regulatory momentum in Washington as a dominant near‑term factor for institutional demand.
Presto Research head of research Peter Chung said the industry’s lobbying and the approaching midterms make a legislative outcome likely, adding, “The market narrative constantly evolves. Right now, it is right to focus on the CLARITY Act as it is an event that will shape the industry growth in the long run.” Chung also noted that policy will influence institutional demand and long‑term positioning.
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