Why the $3T stimulus spending package, Prez-Elect, Biden Readies could favour further BTC growth?

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Biden’s fiscal stimulus package could push the price of the BTC higher.

The incoming Biden administration’s proposal to flood the US economy with trillions of dollars could set off the next leg of the Bitcoin (BTC) bull run as more buyers seek shelter from the crumbling US dollar.

Axios, a news source based in Arlington, announced Thursday that Joe Biden asked Congress to offer US $2,000 in stimulus payments to help mitigate the economic destruction of Covid-19. The next president has announced a $3 trillion tax and investment plan as part of his Bring Back Better policy.

Biden repeated his demand for further direct relief to the Americans after Friday’s disappointing work report showing a loss of 140,000 jobs in December.

He said:

“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 something to go by, the latest liquidity tidal wave could be another bitcoin driver when more capital enters the economy and finds its way to asset prices.

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Donald Trump, a Republican, was no stranger to stimuli. Under his leadership, the US passed an unprecedented $2 trillion stimulus bill in March. Trump has signed a $900 billion aid package last month that would pave the way for $600 stimulus checks.

The federal government’s inflation-boosting measures coincided with the Federal Reserve’s record-breaking operation, which invested trillions of dollars in 2020 to tackle the cash crunch and keep overnight prices under control.

The Federal Reserve’s balance sheet has exploded this year. 

While these policies have created a clear backstop for risk-on assets – a term that has included Bitcoin in the past – the emerging paradigm around BTC is that it is a hedge against inflation.

This is not only corroborated by Bitcoin’s historic success over the past 11 years, but also by a fresh surge of investment capital flooding the sector. Institutions are buying Bitcoin with a specific intent and will one day become the “mega-HODLers” of the sector.

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Bitcoin’s digital gold story has been one of the main catalysts behind the systemic move to BTC. This narrative helped drive Bitcoin’s 300 percent surge in 2020 and more than double the price over the past three weeks. This pattern could accelerate in 2021 as the dollar’s buying power begins to deteriorate.

And JPMorgan Chase has noted that Bitcoin is stealing market share from gold, a conventional haven currency. On Friday, one bitcoin was worth more than 22 ounces of gold, a new all-time record.

-cointelegraph

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