What Does The $1.9 Trillion Stimulus Package Mean For BTC?

Following the house’s approval, U.S president Joe Biden recently signed off his $1.9 trillion stimulus package — an ambitious rescue plan aimed at providing relief due to the effects of the coronavirus pandemic. The bill is one of the most significant interventions ever made into the American economy, surpassing the $787 billion package issued to support the 2008 financial crisis.

So, What Does It Mean For Bitcoin

According to experts, the stimulus will undoubtedly affect certain sections of the economy; it should cause a spike in inflation and weaken the U.S dollar. But what about Bitcoin, and where does it fit in all this?

Well, according to Jason Deane, a Bitcoin analyst based in Quantum Economics, there is a good chance that some of the money from the stimulus will end up invested in flagship Cryptocurrency. And out of the many Cryptocurrencies making rounds out there, Bitcoin is by far the most popular.

The main reason for this reasoning is that Bitcoin appeals to most as a hedge against inflation. You see, just like other scarce assets like digital gold, Bitcoin is an asset that the government can’t devalue by coming in and printing more of it. Therefore, as the U.S. dollar declines in value, it is likely that Bitcoin’s value will either remain either unchanged or will go up.

How The Bitcoin Has Changed So Far

Since the stimulus package was passed, the price of Bitcoin has bumped up, surpassing the $57,000 threshold and reaching one of its all-time highs. However, to be completely transparent, it isn’t exactly clear whether the recent spike is directly attributed to the stimulus package. The correlation between Cryptocurrency and the recent macroeconomic event remains up for debate.

Prices Of Most Assets are Expected To Rise

If there is one particular thing, the stimulus will bring an inflow of cash into the economy. And historically, it has been seen that with an influx of more USD into the market, prices of assets tend to rise, which includes everything from securities and art to real estate and now cryptocurrencies.

Arcaro be1.9 believes that the $1.9 trillion inflow will likely cause inflation. The best way to prevent losses during inflation is to invest in either gold or digital gold. Digital gold, in this case, referring to Bitcoin or its slightly less popular counterpart Ethereum.

Takeaway

So the bottom line is that, driven by the fear of the devalued U.S. Dollar, people will likely turn to Bitcoin. You can also expect more institutions to pivot to BTC because of the stimulus package. Additionally, long-term investors continue to invest in assets unfazed by inflationary pressures. And, as it stands, this strongly includes cryptocurrencies.

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