President Joe Biden has signed the $2 trillion stimulus package into law. This followed the House of Representatives’s passage of the bill into law. The development is expected to shoot Bitcoin’s price to more record levels. Many analysts and observers are optimistic that the package would devalue the US dollar and strengthen Bitcoin, which has been rising after the Senate ratified the bill. The intervention is one of the largest American government’s support programs after the 2nd World War. Although it is a little shy away from the $2.20 trillion COVID-19 stimulus package with which the government used to cushion the effects of the pandemic in March 2020. However, it’s far higher than the $787 billion financial intervention given by the government during the 2008 global economic crisis.
Many Beneficiaries of the Stimulus Package to Invest in Bitcoin
According to a crypto analyst, Jason Deane of Quantum Economics, there is a high possibility that many of the beneficiaries will invest part of the package in some of the cryptocurrencies– either Bitcoin or altcoins. Deane hinged his reason on the fact that Bitcoin is now fully positioning itself as a viable hedge against inflation. The more the dollar declines, the better it is for Bitcoin, which is now widely referred to as digital gold because of any government’s inability to devalue it by printing more Bitcoin. As soon as the Senate passed the stimulus package, the Bitcoin’s price shot up, reaching the $55,000 level.
Sincerely, we are unsure if there is a direct link between the Bitcoin’s price and the current stimulus package. Even, there is an ongoing discussion on the price of Bitcoin and the macro environment. Meanwhile, Ingo Fielder, another crypto expert, sees the brief rise in Bitcoin’s price as a short response to the government’s intervention. However, Bitcoin has continued its steady rise and faster in the wake of the COVID-19 pandemic and seems to have continued its bullish momentum.
More Inflow of USD Will Raise Bitcoin’s Price
The further inflow of the US dollar into the economy will raise the prices of assets higher, according to Fielder. All assets ranging from art, securities, and cryptocurrencies feel the impact of the increase in US dollar supply; the dollar will rise relative to other assets. Also, Sui Chung of CF Benchmarks shares the same view that more people will invest in Bitcoin as a response to the expected devaluation of the US dollar. Chung added that more institutional investors would soon join the crypto community as a reaction to the government’s injection of more money into the economy through the stimulus package. For instance, pension funds and insurance companies will join Bitcoin because they are more affected by the long-term rates. Hence, they would prefer to invest in markets that are less affected by inflation, like the crypto market.
More multinationals have decided to invest in Bitcoin as the digital asset is becoming more widely accepted In many parts of the world. As soon as the stimulus package was passed by the senate, a firm that specializes in making apps, Meitu decide to add Bitcoin to its balance sheet. Likewise, Aker ASA of Norway included BTC in its balance sheet. Apart from institutions, some Twitter enthusiasts have started sensitizing their followers on the best ways to invest their stimulus package in Bitcoin to earn significant profits in the nearest future. For example, a Twitter handle, BitcoinStimulus, recalled how $1,200.00 last year stimulus invested in Bitcoin is worth $10,000.00, gaining more than 700%.