Biden’s fiscal stimulus plan could send the Bitcoin price rocketing higher
So the Trump administration has failed Biden and shortly, under Biden’s direction, will the Bitcoin price & cryptocurrency market and other traditional financial markets are affected? Because, according to media channel Axios, Joe Biden asked Congress to provide Americans with $ 2,000 stimulus payments to help offset the economic devastation of COVID-19. This is a useful decision for the people, but it also partly affects the exchange rate of the USD.
Biden and an economic stimulus plan of trillions of dollars could keep Bitcoin going
The incoming Biden’s administration plan to flood the U.S. economy with trillions of dollars could ignite the next leg of the Bitcoin bull market, as more investors seek refuge from a crumbling United States dollar. Furthermore, the incoming president has also proposed a $ 3 trillion tax and infrastructure package as part of his “Build Back Better” program.
Biden doubled down on its calls for more direct aid to Americans after its employment report showed 140,000 unemployed in December.
“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.”
If 2020 is anything to go by, the new tide of stimulus could be another catalyst for Bitcoin as more money floods the market and finds its way into cryptocurrencies.
The Federal Reserve’s balance sheet has exploded this year
Under the leadership of Donald Trump, the United States passed a historic $ 2 trillion stimulus bill in March. Trump also signed a $ 900 billion bailout last month to kick-off stimulus tests worth $ 600. The federal government’s inflation-boosting policies coincided with record intervention from the Federal Reserve, which deployed trillions of dollars by 2020 to combat a liquidity crisis and keep interest rates through the night under control.
The Federal Reserve’s balance sheet has exploded this year. While these policies have created a strong backing for risky assets – a portfolio that has included Bitcoin in the past – the emerging story surrounding BTC is that it is a hedge against inflation.
This is not only corroborated by Bitcoin’s historic remarkable performance over the past 11 years, but also by the wave of new institutional entry into the market. Organizations are buying Bitcoin with a definite purpose and may one day become the major holders of the industry.
Bitcoin’s digital gold story is one of the biggest catalysts behind the institutional change for BTC. This story has helped drive Bitcoin’s 300% gain in 2020 and more than doubled in price over the past three weeks. This trend is likely to increase in 2021 as dollar purchasing power continues to erode.
Even JPMorgan Chase admits that Bitcoin is taking market share from gold, the traditional haven asset. On Friday, one Bitcoin was worth more than 22 ounces of gold, representing a new all-time high.
Bitcoin price is still going up
According to Ecoinometrics, a crypto data research firm, Bitcoin is likely to increase hundreds of percent if the coin follows the same path it set after the halving four years ago. The Halving reduced the amount of BTC hitting the market per day, meaning that increased demand would have a relatively large impact on price action compared to prior to the event.
#Bitcoin after the Halving
Jan. 06, 2021
239 days after the 3rd halving.#BTC at $34,612.
I know it is still months away but who else is curious to see how close we’ll get to $286,000 in October?
See the pinch of the growth range on Oct. 17 👇 pic.twitter.com/ZSKbJMh0sm
— ecoinometrics (@ecoinometrics) January 6, 2021
According to Ecoinometrics analysis, if the price of Bitcoin follows the trajectory it achieved after the previous halving, then BTC will likely hit around $ 286,000 by October. The $ 286,000 level is 600% higher than the market price.
While $ 286,000 sounds like an odd price target for crypto investors who have experienced market shock in early 2020, there are Wall Street investors who agree with the above price expectations: $ 100,000.
Guggenheim Investments CIO Scott Minerd said in December that with Bitcoin scarcity and the depreciation of the US dollar, BTC can be traded for up to $ 400,000. Guggenheim Investments is a well-known Wall Street investment firm that has started to allocate some capital into Bitcoin due to the ongoing macroeconomic trend. Other well-known investors that agree with this lofty view include SkyBridge Capital.
SkyBridge Capital, which currently owns more than $ 300 million in BTC, explained in a recent announcement that Bitcoin has the potential to surpass $ 500,000 as it is a much better store of value and payment mechanism than gold. .
Similarly, former Goldman Sachs hedge fund sales manager Raoul Pal has said that if the coin truly becomes the core of the next financial system, we could easily see it break past $ 1$ 1,000,000.
You can see the BTC price here.
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