Speaking on One America News Network, Trump described the payments as “a dividend to the people of America.” The announcement sparked immediate debate about economic impacts and, for crypto traders, memories of the 2020-2021 bull run.
The proposal comes as tariff collections surge. The U.S. has pulled in roughly $215 billion in tariff revenue since April 2025, with Trump claiming the total will eventually top $1 trillion annually. But getting those checks into American wallets faces serious obstacles, from Congressional approval to a Supreme Court challenge that could unravel the entire tariff program.
The Political Battle Over Stimulus Checks
Senator Josh Hawley of Missouri introduced legislation in July 2025 called the American Worker Rebate Act. His bill would guarantee at least $600 per person, meaning a family of four would receive $2,400. If tariff revenue grows, those payments could increase too.
Not everyone in Washington supports the idea. Several Republican senators have publicly rejected the rebate plan. Senator Rand Paul called it “ridiculous” given America’s $37 trillion debt. Most fiscal conservatives argue tariff money should reduce the national debt, not fund new spending.
Economists warn the plan could backfire. JPMorgan Asset Management’s David Kelly told CNN that “stimulus checks in a full employment economy is like dessert before eating your spinach.” The concern: pumping cash into an already hot economy could drive prices even higher, since tariffs themselves increase costs for imported goods.
What Happened Last Time: The 2020-2021 Crypto Boom
Crypto traders remember the last stimulus era vividly. Between March 2020 and November 2021, Bitcoin surged over 1,000%, climbing from around $6,000 to $69,000. Someone who invested all three COVID stimulus payments (totaling $3,200) into Bitcoin at the right time would have holdings worth over $50,000 today.
But the real action happened in altcoins. Bitcoin’s market dominance—its share of total crypto value—crashed from 73% to 39% in just six months through May 2021. Retail investors piled into everything from Ethereum to meme coins, creating what traders call “alt season.” Dogecoin, Shiba Inu, and countless other tokens saw explosive growth.
Research backs up these trading patterns. A 2023 Harvard Kennedy School study found that stimulus payments drove people toward crypto investments. Looser budgets meant more risk-taking, while inflation fears pushed investors to seek hedges outside traditional assets.
Why This Time Could Be Different
Market conditions have shifted dramatically since 2020. Interest rates now sit above 4%, compared to near-zero during the pandemic. Back then, the Federal Reserve was buying $4 trillion in bonds and flooding the system with liquidity. Today’s environment is far more constrained.
Crypto markets have also matured. Spot Bitcoin ETFs now exist, with institutions pouring billions into regulated products. As of October 3, 2025, Bitcoin ETFs recorded $985 million in net inflows in a single day. BlackRock’s Bitcoin fund leads the pack, attracting massive institutional capital.
Jasper De Maere from market maker Wintermute explained the contrast on LinkedIn: “In 2020, crypto’s institutional rails were barely in place: No spot ETFs, fragmented custody, regulatory ambiguity.” The retail-driven frenzy of 2020-2021 happened because 80-90% of flows came from individual investors chasing quick gains. Today’s market is more sophisticated, which could limit wild altcoin surges.
The total crypto market capitalization now hovers around $4 trillion, up from $3.4 trillion at the end of 2024. Larger markets typically move more slowly than smaller ones, another factor that might dampen the impact of stimulus checks compared to five years ago.
The Government Shutdown Factor
Adding complexity to the situation, the U.S. government shut down on October 1, 2025, after lawmakers failed to pass a funding bill. Bitcoin responded by surging above $119,000, with traders betting that the shutdown would force the Federal Reserve to cut interest rates further.
The shutdown delays key economic data releases, including jobs reports and inflation figures. Without this information, markets struggle to predict Federal Reserve moves, creating volatility. For crypto, this uncertainty has proven bullish in the short term, with investors treating Bitcoin as a hedge against government dysfunction.
However, the shutdown also stalls regulatory work. The SEC has paused reviews of over 90 pending crypto ETF applications, including anticipated approvals for Solana-based products. Ron Hammond from Wintermute warned that prolonged shutdowns increase “partisan bitterness” around important crypto policy discussions.
Legal Threats and Reality Checks
The Supreme Court will hear arguments on Trump’s tariff authority on November 5, 2025, after lower courts ruled parts of his tariff program illegal. Treasury Secretary Scott Bessent warned that an unfavorable ruling could force the government to refund between $750 billion and $1 trillion. That would eliminate the funding source for any stimulus checks.
Even if the tariffs survive legal challenges, Congressional approval remains uncertain. The House and Senate would need to pass legislation authorizing the payments, a difficult task given Republican opposition and the current government shutdown.
Tariff revenue projections also face scrutiny. While Trump claims collections will exceed $1 trillion annually, current numbers tell a different story. The Treasury Department reported $214.9 billion collected so far in 2025—substantial, but well short of Trump’s forecast.
The Road Ahead: Stimulus or Speculation?
Markets are pricing in optimism. The CoinDesk 20 Index—tracking the largest cryptocurrencies—has climbed 48% in 2025, significantly outpacing smaller tokens. Trader sentiment suggests Bitcoin could test $130,000 in the near term, with some analysts projecting $150,000 by year-end.
Yet serious questions remain. Will Congress approve the payments? Will the Supreme Court uphold the tariffs? How much money will actually flow into crypto if checks do arrive?
Crypto analyst Miles Deutscher captured the excitement on X (formerly Twitter): “If this passes, it could be a massive catalyst for crypto. Remember what happened last time retail got stimulus cheques in 2021.” But others urge caution, noting that today’s higher interest rates, mature market structure, and economic conditions differ sharply from the pandemic era.
The Federal Reserve’s October 29 meeting looms large, with markets pricing in a 99% chance of a rate cut. Lower rates typically boost risk assets like crypto by increasing liquidity and making borrowing cheaper. Combined with potential stimulus checks, this could create favorable conditions for digital assets through the end of 2025.
Final Take: Waiting for Clarity
Trump’s tariff-funded stimulus proposal has crypto traders buzzing about another boom period. The 2020-2021 precedent shows stimulus can drive explosive growth, particularly in altcoins. But significant hurdles remain before any checks reach Americans—legal challenges, Congressional gridlock, and questions about tariff sustainability.
The crypto market has evolved since the pandemic. Institutional investors now dominate flows, interest rates sit at restrictive levels, and market conditions reflect full employment rather than economic crisis. These factors could limit the impact of stimulus payments compared to five years ago.
For now, traders are betting on the possibility rather than the certainty. Whether Trump’s “dividend to the people” materializes—and whether it sparks another alt season—remains an open question heading into the final months of 2025.