The administration of Joe Biden, current president of the United States, is causing a new positive impact on Bitcoin and cryptocurrencies, which rebounded after learning of the Senate's approval of a new stimulus package for $1,9 trillion.
As many experts in the digital industry express, the incredible capacity, or nerve, that governments have to print money hand over fist is what is directly influencing the appreciation of the cryptocurrencies, . And it seems true, because shortly after it became known that the United States Senate approved a new stimulus package for 1,9 trillion dollars, the prices of several cryptocurrencies, mainly Bitcoin (BTC), began to grow in value. A familiar scenario, if you remember the similar events that occurred the previous year.
When the pandemic spread, in March of last year, the price of Bitcoin fell to approximately $3.500 USD, its lowest price seen in all of 2020. However, after Donald Trump approved the first stimulus package, under the Act of Coronavirus Aid, Relief and Economic Security (CARES) approved that same month, the cryptocurrency quickly recovered its value in the markets, and maintained an upward trend until the end of the year, with certain favorable corrections, which raised its price well above its high in 2017. By the end of December, Bitcoin was worth close to $29.000 USD per unit.
Many analysts believe that the mountains of debt that governments are creating with this money printing, and the possible entry of new investors into Bitcoin, is what will raise its price considerably, again.
It may interest you: New US stimulus package may boost Bitcoin price
Bitcoin in difficult times
The decision of the Democrats in the United States Senate to approve the new stimulus package will deliver economic benefits to unemployed people, families, and state and local governments to reactivate the country's economy. But, although it sounds like something good and positive, the truth is that these measures can have a great economic impact, which implies an increase in inflation levels and the devaluation of money, as experts point out.
The possible and dire consequences of massive money printing is what drives investors and ordinary citizens to look for alternatives that insure their funds against devaluation. In this scenario, Bitcoin and cryptocurrencies appear as those great and infallible options, which also promise to generate long-term returns.
Although the announced stimulus package was $3 trillion, experts and advocates of Bitcoin and the crypto industry believe that Biden's $1,9 trillion will be enough to strengthen Bitcoin. As several bitcoiners highlighted at the beginning of the year, the promise of a new stimulus package raised the price of BTC by 35%.
Now, the confirmation of an additional 1,9 trillion dollars to the US economy is enough for Bitcoin to resume the upward trend, and perhaps reach a new all-time high.
More retail investors
On the other hand, the decision that many of the beneficiaries of the new stimulus package may make to invest in bitcoins and cryptocurrencies may also encourage the price of these digital assets to rise in the market.
Although it is not completely certain that all the beneficiaries of the stimulus delivered by the previous US administration last May, of $1.200 USD in the form of checks, were allocated to investing in bitcoins, many exchanges operating in the country reported a large increase in the amount of deposits to buy BTC with this amount of money: 1.200 $ USD. At that time, users who decided to invest these resources in cryptocurrencies acquired about 0,13 BTC, valued to date at more than $6.560 USD. A revaluation of 540% in less than a year.
A new bullish cycle driven by the promise of stimuli?
Bitcoin has gained nearly $3.000 USD since March 6 when the news of the new stimulus was released. The market-leading cryptocurrency, which was hovering around $47.400 USD on Saturday, is currently trading at a value of $50.450 USD, although it reached $51.700 USD yesterday. The cryptocurrency is recovering from several corrections seen last week, which took its price below $46.500 USD.
Meanwhile --Gary Gensler, nominated for chairman of the United States Securities and Exchange Commission (SEC), declared his first nomination hearing, which “Bitcoin and cryptocurrencies have been a catalyst for change and have brought new ideas to payments and financial inclusion”Gensler, who serves as a professor of Bitcoin and Blockchain at MIT, believes that new technologies will replace many of the intermediaries that exist in the current financial system.
Continue reading: Americans purchase cryptocurrencies with their stimulus checks
