The Biden administration’s upcoming plan to flood the US economy with trillions of dollars could spark the next phase of Bitcoin (BTCA bull market, as more investors take refuge from the collapsing US dollar.
Axios, a news outlet based in Arlington, mentioned On Thursday, Joe Biden asked Congress to provide Americans with $ 2,000 stimulus payments to help offset the economic devastation of the Covid-19 virus. The new president has also proposed a $ 3 trillion in tax and infrastructure package as part of his “Build Back Better” program.
“Economic research confirms that under conditions like the current crisis, especially with low interest rates, taking immediate action – even with deficit financing – will help the economy.”
If 2020 is anything to come by, the new wave of stimulus could be another catalyst for bitcoin as more money floods the market and makes its way into asset prices.
Even Donald Trump, a Republican, was no stranger to stimulation. Under his leadership, the United States Passed successfully A historic $ 2 trillion stimulus bill in March. Trump, too Occurred A $ 900 billion relief package last month should set the stage for $ 600 stimulus packages.
The federal government’s inflationary policies coincided with the record intervention from the Federal Reserve, which Spread Trillions of dollars in 2020 to combat the liquidity crisis and keep overnight interest rates under control.
Although these policies provided strong support for risky assets – a category that has included Bitcoin in the past – the emerging narrative surrounding BTC is that it is a hedge against inflation.
This is confirmed not only by Bitcoin’s historic outperformance over the past 11 years but also by the new wave of institutional money entering the market. Institutions are buying Bitcoin with the obvious purpose, and maybe one day They became the “Big HODLers” in the industry.
Bitcoin’s digital gold listing has been one of the biggest catalysts behind the institutional shift towards BTC. This narrative helped fuel Bitcoin’s 300% rise in 2020 and beyond More than doubled in price during the past three weeks. This trend may intensify in 2021 as the purchasing power of the dollar continues to erode.