Why Is The COVID-19 Stimulus Beneficial For Bitcoin?
Last Updated on 12 October 2020 by CryptoTips.eu
Over in the US, the Democratic leader of the House, Nancy Pelosi, is pushing for another round of stimulus payments to be sent out to struggling Americans who are out of work because of COVID-19.
Unemployment has risen mostly in the service sector and small businesses, of which there are a lot in the Midwest. The Democrats need to break into the rural areas in those states as President Trump holds a comfortable lead there. Whereas New York and California are clearly voting Democratic, Ohio and Kansas are far less likely to do so.
Pelosi’s goal (which would cost near $1.8 trillion) could, according to many analysts, become a very good piece of news for Bitcoin.
Square upswing
The best-known crypto is in an upswing that lasted all weekend, and a resolve of the stimulus package could carry the price over $12k.
99.9% of the money in the world is invested in assets like cash, stocks, bonds, gold, & real estate. #Bitcoin is competing with alt assets, not alt coins. Educating the majority should be more constructive than debating the minority.
— Michael Saylor (@michael_saylor) October 11, 2020
It started breaking out of it’s boring trend, which kept it stuck between $10k and $11k on Friday, after Square CEO Jack Dorsey announced that his company was investing 50 million dollars by buying bitcoins.
Inflation hedge
Many firms on Wall Street have started seeing an investment in Bitcoin as an inflation hedge. Given the near certainty that a new stimulus package in the US would mean that the Federal Reserve needs to start printing money again, this would mean that the US dollar would seek the 1,20 level versus the Euro once more and thus Bitcoin would automatically be pushed higher.
#Bitcoin bull cycle is repeating. Production cost indicator is showing 12k and price is right now 11400. Historically the price gets obove the production cost sooner rather than later. The gurus who has been predicting 3k crash will look pale. pic.twitter.com/HedyLKSw7m
— bitcoin_ronahi (@BitcoinRonahi) October 11, 2020
Questions then remain whether $13k comes in sight or not and whether Donald Trump will allow the Democrats to score a win before the 3 November election.
