Name Price24H (%)
Bitcoin (BTC)
$33,492.00
-1.51%
Ethereum (ETH)
$1,952.88
-2.31%
XRP (XRP)
$0.65
2.94%
Litecoin (LTC)
$133.14
3.05%
As Biden Preps $3T Stimulus, Bitcoin Could be set to Erupt
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As Biden Preps $3T Stimulus, Bitcoin Could be set to Erupt

Axios, an Arlington-based news outlet, reported Thursday that Joe Biden has asked Congress to provide Americans with $2,000 in stimulus payments to help offset the economic devastation of Covid-19. The incoming president has also proposed a $3 trillion tax and infrastructure package as part of his “Build Back Better” program.

When more investors seek refuge from a crumbling United States dollar, the incoming Biden administration’s plan to flood the U.S. economy with trillions of dollars could ignite the next leg of the Bitcoin (BTC) bull market.

“Economic research confirms that with conditions like the crisis today, especially with such low interest rates, taking immediate action – even with deficit financing – is going to help the economy” – Biden said

The new tidal wave of stimulus could be another catalyst for Bitcoin as more money floods the market and makes its way into asset prices. Under his leadership’s Donald Trump, the United States passed a historic $2 trillion stimulus bill in March. Trump also signed a $900 billion relief package last month that would pave the way for $600 stimulus checks. The federal government’s inflation-boosting policies have coincided with record intervention from the Federal Reserve, which deployed trillions of dollars in 2020 to combat a liquidity crisis and keep overnight rates under control.

The Federal Reserve’s balance sheet has exploded this year. 

Although these policies provided a strong backstop for risk-on assets but the emerging narrative surrounding BTC is that it’s a hedge against inflation. Institutions are buying Bitcoin with a clear purpose, and may one day become the industry’s “mega HODLers.”

Bitcoin’s digital gold narrative has been one of the biggest catalysts behind the institutional shift towards BTC. This narrative helped fuel Bitcoin’s 300% rally in 2020 and its more than doubling in price over the past three weeks. This trend could intensify in 2021 as the dollar’s purchasing power continues to erode.

On Friday, one Bitcoin was worth more than 22 ounces of gold, which represents a new all-time high. Even JPMorgan Chase has acknowledged that Bitcoin is taking market share from gold, the traditional haven asset.

<Source: Cointelegraph>

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