According to The Kobeissi Letter, the US budget deficit has averaged 9% of GDP over the past five years, with the most recent 12 months alone reaching a 7% deficit—surpassing levels seen during the 2001 and 1980s recessions (source: Twitter/@KobeissiLetter, May 26, 2025). For crypto traders, this persistent fiscal imbalance can drive increased interest in decentralized assets like Bitcoin and Ethereum as hedges against potential dollar devaluation and inflation. Historically, high deficits have contributed to concerns about monetary policy stability, often resulting in heightened volatility and trading opportunities within the cryptocurrency market.

According to Crypto Rover (@rovercrc) on Twitter, the ongoing decline of the U.S. dollar is directly linked to a bullish outlook for Ethereum (ETH). As the dollar weakens, traders are increasingly seeking alternative assets like ETH, which can act as a hedge against fiat currency depreciation. This macroeconomic shift supports increased capital inflows into the crypto market, especially Ethereum, potentially driving its price higher in the near term. Traders should monitor USD performance closely for signals impacting ETH price action, as further dollar weakness could bolster Ethereum demand, according to Crypto Rover's analysis (Source: Twitter @rovercrc, May 25, 2025).