The nomination of Scott Bessent to Treasury and the likely elevation of Kevin Hassett to the Fed chair have triggered a reassessment of risk allocation across markets, with the term Bitcoin supercycle entering mainstream debate. The pair’s apparent plan to coordinate aggressive fiscal and monetary measures, weaken the dollar and flood liquidity into risk assets places Bitcoin at the center of a potential multi‑asset rally. Traders must weigh accelerating institutional demand against heightened policy‑driven volatility.
Bessent and Hassett argue for a coordinated Treasury–Fed approach that treats central banking as a tactical liquidity tool aligned with fiscal goals, a departure from the post‑2008 orthodoxy. That regime rewrite is intended to reduce real debt burdens via inflationary expansion and a softer dollar, conditions that historically favor risk assets. In this framework Bitcoin is framed as a hedge against policy‑driven currency debasement and a strategic national asset under recent proposals such as a Strategic Bitcoin Reserve and a U.S. Digital Asset Stockpile.
The administration’s regulatory moves—banning CBDCs, rescinding prior accounting guidance, and enabling spot crypto trading on regulated exchanges—are cited as structural enablers for wider institutional adoption, which would amplify flows into Bitcoin and adjacent markets.
Market technicians and allocators should watch three channels closely: institutional flows, liquidity/backstop policy signals and supply dynamics. A supply shock from the 2024 halving (the programmed reduction in Bitcoin mining rewards) is listed among drivers that, when combined with a liquidity surge, could magnify price appreciation.
How the proposed policy shift could fuel a Bitcoin supercycle
One behavioral signal comes from senior policymakers: Hassett has expressed “extreme bullishness toward equities and Bitcoin,” and reportedly holds a material stake in a major crypto exchange—facts that signal both demand alignment and potential concentration of political risk.
Analysts named in recent commentary have issued high price targets for BTC and ETH under this scenario, underscoring the market’s sensitivity to narrative and flows. Operational takeaway: monitor inflows into institutional vehicles, spot‑market volumes and funding/open interest metrics for signs the theoretical supercycle is translating into leveraged positioning.
Critics warn the pairing risks conflicts of interest and weakened oversight. Policy moves cited include the disbanding of enforcement units, high‑profile pardons, and lighter regulatory guardrails—actions that could cut both ways for markets by reducing friction but also increasing tail‑risk from governance shocks. The narrative of an inevitable perpetual supercycle is contested; skeptics point to the historical recurrence of deep corrections and challenge the sustainability of ever‑rising allocations. For market participants the salient risk is amplified leverage: if hedging remains thin or derivatives skew becomes one‑sided, rapid reversals could produce outsized losses.
The Bessent–Hassett policy vector materially raises the probability of an extended BTC upcycle by combining regulatory clarity, institutional endorsement and liquidity expansion; however, it also concentrates political and governance risks that can magnify volatility.
