A combination of soaring equity markets, expanding money supply, and rising fiscal risks is setting the stage for a historic July rally in Bitcoin, the world’s largest cryptocurrency.

Bitcoin (BTC) is currently trading around $108,140.48 and appears ready to challenge its all-time high this month, fueled by a convergence of macroeconomic and market dynamics that are pushing investors toward riskier assets.

U.S. stock markets are hitting new records, with the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average all trading near historic highs. This robust performance reflects strong investor confidence, often leading to capital flowing into alternative assets like Bitcoin. Currently, BTC is trading less than 3% below its May peak near $109,000.

One key driver is the U.S. M2 money supply, which has climbed to an unprecedented $21.9 trillion and has hit monthly highs consistently over the past year. This increase in liquidity is fueling demand for financial assets as investors seek stores of value amid rising government debt.

Billionaire investor Ray Dalio, founder of Bridgewater Associates, highlighted fiscal concerns tied to President Donald Trump’s recently passed “Big Beautiful Bill.” The legislation locks in approximately $7 trillion in annual spending against revenues of just $5 trillion, projecting debt levels to rise from 100% of GDP to 130% over the next decade.

Dalio warned on X that unless budget deficits shrink from about 7% of GDP to roughly 3% through adjustments in spending, taxes, and interest rates, the U.S. could face significant economic disruptions.

Historically, July tends to be a strong month for Bitcoin, with average gains around 7%, providing a seasonal boost. All indications suggest Bitcoin is well-positioned to set new highs in the coming months.