Key Takeaways
What’s Driving the Recent Crypto Rally?
A $440 billion stimulus, Fed rate cuts and controlled inflation have fueled bullish short-term positioning, driving up the market cap for cryptocurrencies.
Are there risks for investors?
Rising inflation, mounting U.S. debt and insufficient tariff revenues could lead to a 2022-style pullback in 2026.
It looks like the US economy is back on its feet.
After almost 40 days the government shutdown is finally lifted. And at just the right time, this came shortly after President Trump posted approximately a $2,000 “tariff dividend” for Americans, excluding higher incomes.
From that moment on, the crypto market did not wait anymore.
It tore almost 40% and pushed total market capitalization to about $3.57 trillion. But the bigger question is what this means going forward. Is Incentive Really the Key Driver Driving Crypto’s Momentum in Late 2025 and 2026?
Capital flows rise as stimulus measures increase risky assets
Short-term crypto investors’ positioning has turned firmly bullish.
From a macro perspective, this step is not arbitrary. The stimulus check is landing in a relatively stable place, buoyed by “softer than expected” data, such as inflation remain under control despite persistent rates.
Add to this the Fed’s easing cycle, with two interest rate cuts already in place, and the liquidity environment becomes even more favorable for risky assets. bIn short, crypto investors are counting on the stimulus to fuel capital flows.
Source: X (Kobeissi letter)
From a technical point of view analysts see a $440 billion stimulus on the horizon.
Based on the chart above, there are roughly 220 million American adults who meet the income criteria, with the top 15% excluded as “high income.” That amounts to about 220 million × $2,000, or $440 billion in payouts.
Against this backdrop, crypto enthusiasts were quick to act draw parallels with the COVID stimulus cycle of 2020 and the bull run of 2021. That being said, analysts still advise caution. So, is long-term crypto positioning still in limbo?
Crypto bulls face headwinds from stimulus and debt
The 2020 stimulus cycle later played out during the 2022 bear market.
For context: in 2020, the US government rolled out three laps of stimulus checks to boost liquidity, totaling more than $814 billion.
The result? These payouts sparked a bullish rally, sending the crypto market soaring by over 180%.
That said, as noted in the Kobeissi letter, the influx of liquidity also caused a massive inflation cycle, pushing the US inflation index to 9% by June 2022, which in turn activated the annual decline of the crypto market by 70%.
Source: X (Kobeissi letter)
In short, the long-term impact of the stimulus could be bearish for crypto.
That said, the question is: will tariffs offset some of this pressure?
In August 2025, the US collected $30 billion in tariff revenue. Still, the deficit that month was $345 billion, so tariffs covered only 10% of the deficit.
Add $37 trillion to that US debtand a stimulus of this magnitude could create more tension. So the short-term positioning looks bullish, but rising inflation and mounting debt could lead to a 2022-style crypto pullback heading into 2026.