Crypto Markets Open Mixed as Trump Tax Bill Passes, Strong Jobs Data Boost Risk Assets

Cryptocurrency markets opened the holiday-shortened trading session with modest gains, as Bitcoin climbed above $109,000 and Ethereum approached $2,600, buoyed by broader risk asset optimism following the passage of U.S. President Donald Trump's massive tax and spending bill and surprisingly strong U.S. employment data.

Bitcoin traded at $109,275, up 0.61% in the past 24 hours, while Ethereum gained 0.48% to $2,584. The global cryptocurrency market capitalization reached $3.37 trillion, marking a 0.38% increase as digital assets tracked traditional markets higher, per Coinmarketcap data.

Tax Bill Passage Fuels Growth Optimism

The Republican-controlled House of Representatives approved Trump's "One Big Beautiful Bill" on Thursday evening, a sweeping $3.4 trillion tax cut and spending package that will add significantly to the nation's $36.2 trillion debt over the next decade. The president is expected to sign the legislation Friday at 5 p.m.

Market analysts view the massive fiscal stimulus as potentially bullish for risk assets, including cryptocurrencies, though inflation concerns linger. "Investors who have driven this market higher are betting that the potential for growth in the economy from the bill exceeds the potential for inflation," said Rick Meckler, partner at Cherry Lane Investments, Reuters reported .

The legislation makes permanent the lower individual and business tax rates from Trump's 2017 package while increasing spending on immigration enforcement and military programs. It also reduces Medicaid reach and eliminates clean energy incentives.

Jobs Data Surprises to Upside

U.S. employment data released Thursday showed the labor market remained resilient in June, with nonfarm payrolls increasing by 147,000 jobs - well above the 110,000 expected. The unemployment rate fell to 4.1% from 4.2% in May, though nearly half the job gains came from the government sector.

The solid jobs report helped drive traditional markets to record highs, with the S&P 500 and Nasdaq both closing at all-time peaks. The rally lifted sentiment across risk assets, benefiting cryptocurrencies as well.

"We are seeing a real bout of irrational exuberance; the stock market is very biased towards optimism," said Kristina Hooper, chief market strategist at Man Group. "But there's some basis for it. I think there is some level of relief because the jobs report was not as weak as it could have been."

Crypto Sentiment Remains Neutral

Despite the modest gains, cryptocurrency sentiment remains in neutral territory with Coinmarketcap's Crypto Fear & Greed Index at 55 out of 100, suggesting neither extreme optimism nor pessimism among traders.

The combination of expansionary fiscal policy and solid economic data has traders reassessing Federal Reserve policy expectations. Recent analysis suggests Ethereum, which turns 10 years old at the end of July, is sitting about 75% off its all-time high, indicating significant room for potential upside if risk appetite continues to improve.

With traditional markets closed Friday for Independence Day, crypto trading volumes are expected to remain light as traders assess the longer-term implications of the new fiscal stimulus on inflation and monetary policy.

Market Outlook

Looking ahead, analysts remain cautiously optimistic about cryptocurrency prospects, though concerns about inflationary pressures from the massive spending bill could weigh on sentiment.

The shorter-term focus will likely center on how effectively the economy can absorb the fiscal stimulus without triggering unwanted price pressures.

As one portfolio manager noted about the broader market rally: "This feels like that last bull rush before all of the data really comes together."