Biden’s fiscal stimulus plan could push up the price of BTC.
Biden prepares $3 Trillion stimulus that could erupt BitcoinNOTICS
The next Biden administration’s plan to flood the US economy with trillions of dollars could ignite the next stage of the Bitcoin bullish market (BTC) as more investors seek refuge in a falling US dollar.
Axios, an Arlington-based news agency, reported Thursday that Joe Biden had asked Congress to provide Americans with $2,000 in stimulus payments to help offset the economic devastation of Covid-19. The new president also proposed a $3 trillion infrastructure Bitcoin Code and tax package as part of his „Building Better“ programme.
Biden doubled his request for more direct relief for Americans after Friday’s disappointing employment report, showing a loss of 140,000 jobs in December.
„Economic research confirms that in conditions like today’s crisis, especially with interest rates so low, immediate action – even with deficit financing – will help the economy.
If 2020 is anything to go by, the new stimulus wave may be another catalyst for Bitcoin as more money floods the market and reaches asset prices.
Even Donald Trump, a Republican, knew the stimulus well. Under his leadership, the United States approved a historic US$2 trillion stimulus project in March. Trump also signed a US$900 billion aid package last month that would open the floodgates for US$600 stimulus checks.
The federal government’s policies to increase inflation coincided with record intervention by the Federal Reserve, which employed trillions of dollars in 2020 to combat a liquidity crisis and keep overnight rates under control.
The Federal Reserve’s balance sheet exploded this year.
While these policies provide strong support for risky assets-a category that has included Bitcoin in the past-the emerging narrative around the BTC is that it is a hedge against inflation.
This is not only corroborated by Bitcoin’s track record of superior performance over the past 11 years, but also by the new wave of institutional money entering the market. Institutions are buying Bitcoin for a clear purpose and may one day become the „mega HODLers“ of the industry.
Bitcoin’s digital gold narrative has been one of the biggest catalysts behind the institutional shift towards BTC. This story has helped fuel Bitcoin’s 300% rise in 2020 and its price has more than doubled in the last three weeks. This trend may intensify in 2021 as the purchasing power of the dollar continues to decline.
Even JPMorgan Chase has acknowledged that Bitcoin is gaining market share in gold, the traditional safe haven asset. On Friday, a Bitcoin was worth more than 22 ounces of gold, representing a new historic high.