Tax cuts have consistently been a cornerstone of Donald Trump's political agenda. His first administration helped pass the Tax Cuts and Jobs Act, often referred to as the Trump tax cuts. Now, he is pushing for Congress to pass the One Big Beautiful Bill Act.

Thus far, the House of Representatives has passed the bill, which now awaits a Senate vote, which could be tight. Interestingly, Bitcoin (BTC -2.74%) has surged to new all-time highs while this all plays out.

Is Bitcoin's hot momentum a coincidence or something investors should pursue?

More importantly, what might it say about Bitcoin's investment prospects? I broke everything down for you below.

Image source: Getty Images.

What exactly is in the One Big Beautiful Bill Act?

It probably shouldn't surprise anyone in today's divisive political landscape that the One Big Beautiful Bill Act has garnered controversy. The bill includes efforts to deliver on some of Trump's key campaign promises.

Among other things, the bill would make the tax cuts enacted by the Tax Cuts and Jobs Act permanent and temporarily suspend federal taxes on tips and overtime through 2028. The bill also tightens restrictions on Medicaid and food stamps, core entitlement programs.

But most relevant to this discussion is that the bill would raise the U.S. debt ceiling by $4 trillion from its current $36.1 trillion, a roughly 11% increase.

Bitcoin isn't sending a message; it's responding to one

Regardless of whether you support the bill, it marks a notable shift in the administration's political tone toward addressing fiscal deficits and the national debt.

Elon Musk collaborated with Trump to establish the Department of Government Efficiency (DOGE), which sparked controversy due to the group's aggressive approach to targeting various government departments to identify and recommend cost cuts to Trump and Congress.

But the wheels have essentially fallen off that project. Musk has made it clear that he will be devoting most of his time and energy to Tesla, SpaceX, and his other companies from now on. Additionally, Republican lawmakers have rejected most of DOGE's recommendations. In other words, not much is changing for a government that has spent more than it brings in for more than two decades now.

The One Big Beautiful Bill punctuates that tone with an exclamation point. The Committee for a Responsible Federal Budget estimates that the bill, or a version similar to it, would:

• Reduce federal revenue by between $5 trillion and $11.2 trillion during the next decade.
• Lower revenue by 1% to 3% of gross domestic product (GDP).
• Boost debt from about 100% of GDP today (118% under current law) to between 132% and 149% by 2035.

This isn't a party issue -- both political parties have operated the U.S. government at a fiscal deficit for years. The government appears determined to continue borrowing money, pumping more fiat currency into the global economy.

Bitcoin is an anti-inflationary asset, a valued digital asset with a fixed supply and a dollar-denominated price. Investors wary of the government's apparent failure to rein in its spending are preparing for continued inflation over the long term.

Should investors buy Bitcoin now?

It's worth noting that Bitcoin has historically been volatile and remains so. Bitcoin has no underlying value, such as a business with earnings. It's not a physical asset like gold. Bitcoin's price drops 20% or more on a fairly routine basis, so there's no need to rush into it. Instead, consider dollar-cost averaging.

You can either own Bitcoin directly or through a spot Bitcoin exchange-traded fund (ETF). And as always, Bitcoin should be a component in a well-diversified investment portfolio because nobody knows what the future holds.

If you do want to invest in Bitcoin, do so for the long term. As the U.S. dollar continues to erode under fiscal deficits, investors may continue to seek alternative assets, such as Bitcoin. It's not a guarantee, but Bitcoin has trended higher for more than a decade now. Until the government's spending habits change, that may continue.