The Bitcoin price got as high as $11,439 — which is the first time it had gone above the $11,400 level since September 3 — and by 03:10 UTC, it reached a high of $11,482. Currently, Bitcoin is trading around $11,312, up to 4% in the past 24-hour period.
BTC/USD 4-hour chart | Source: TradingView
So, what’s behind the Bitcoin price surge?
First, there is renewed optimism that the Trump administration and House Democrats, led by House Speaker Nancy Pelosi, will manage to strike a deal on the next major COVID-19 relief package within the next week or two.
President Trump seems to realize that if he wants to increase his chances of winning the U.S. presidential election in November he needs to sign a fiscal stimulus bill before the election. This means making a deal with Pelosi — via his representative Treasury Secretary Steven Mnuchin — and then putting pressure on Senate Majority Leader Mitch McConnell to get the bill passed in the Senate.
On Friday, Trump sent out a tweet in which he urged stimulus negotiators to “go big”, seemingly confirming what he had said earlier in the day during his chat with radio host Rush Limbaugh, where he said that he would like to see a bigger stimulus package frankly than either the Democrats or Republicans are offering.
Covid Relief Negotiations are moving along. Go Big!
— Donald J. Trump (@realDonaldTrump) October 9, 2020
Then, less than three hours later, Pelosi’s spokesperson, Drew Hammill, tweeted that Pelosi and Mnuchin had had a 30-minute conversation at 13:40 EDT and that Mnuchin had come back to the negotiation table with a new proposal (which is believed to cost around $1.8 trillion, i.e. $400 billion less than what House Democrats are asking for).
Of special concern, is the absence of an agreement on a strategic plan to crush the virus. For this and other provisions, we are still awaiting language from the Administration as negotiations on the overall funding amount continue. (2/2)
— Drew Hammill (@Drew_Hammill) October 9, 2020
This renewed optimism about the state of the negotiations over the next major fiscal stimulus package helped the Dow, the S&P 500, and the Nasdaq Composite to advance 3.3%, 3.8%, and 4.6% respectively this past week.
Second, the recent investments in Bitcoin by two Nasdaq-listed companies — MicroStrategy and Twitter — has raised spirits in the Bitcoin community because many are seeing the moves by these two companies (to use Bitcoin as a treasury reserve asset) as the start of a new trend since it is now likely that some other list companies will consider doing something similar, which would help with the problem of increasing institutional adoption of Bitcoin.
This sentiment was echoed by Tyler Winklevoss, Co-Founder, and CEO of crypto exchange Gemini:
First, it was @michael_saylor and publicly traded @MicroStrategy buying $425million of #Bitcoin. Today, it is @jack and @square buying $50million of bitcoin. Tomorrow, it will be another visionary leader, and another, and another…the tsunami is coming https://t.co/MjF5z6u7ha
— Tyler Winklevoss (@tylerwinklevoss) October 8, 2020
Third, the U.S. dollar index (DXY) closed at 93.06 yesterday, down 0.58%. Why does this matter? Well, since March, Bitcoin has been showing a negative correlation with the U.S. dollar.
This year has so far seen a substantial increase in the funding going to blockchain-based companies
This year has so far seen a substantial increase in the funding going to blockchain-based companies. It increased by 79% compared to 2019.
The cryptocurrency industry has no doubt been maturing over the past couple of years, especially after the parabolic market development in 2017. Recent findings indicate that funding for blockchain-based companies has increased by 79% this year, and there are plenty of reasons for it.
As in every relatively nascent industry, there are plenty of companies that are just taking off. In fact, data shows that there are over 3,000 blockchain startups currently registered on Angel List – one of the most popular startup aggregators.
It’s also worth noting that there are many maturing companies that have turned into fully-fledged corporations with a massive number of employees and locations around the world.
You can see the Bitcoin price here.
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