- The U.S. Senate approved a new stimulus package worth about $ 900 billion, including direct payments up to $ 300 billion for small businesses and $ 600 for American adults. With the total amount of economic relief in excess of $ 3 trillion since the beginning of the COVID-19 outbreak, the question remains whether these developments are positive for Bitcoin.
The U.S. Senate approved a new stimulus package worth about $ 900 billion, including direct payments up to $ 300 billion for small businesses and $ 600 for American adults. With the total amount of economic relief in excess of $ 3 trillion since the beginning of the COVID-19 outbreak, the question remains whether these developments are positive for Bitcoin.
As COVID-19 infiltrated the Western world earlier this year, most countries introduced full quarantine practices to combat the spread of the virus. But the unintended consequences hurt global economies and people’s jobs and personal finances.
The US, the world’s largest country by nominal GDP, decided to help its citizens by implementing a massive $ 2.2 trillion stimulus package in March. However, the virus has not disappeared, and the US Senate has begun to discuss another agreement that became official yesterday.
The Republican-controlled Senate voted 92-6 in favor of this second-largest economic aid package in US history. The Assembly, controlled by the Democrats, cast 359-53 votes for approval. President Donald Trump has to sign the bill into law.
At the beginning of the week the money is in the accounts
The package includes $ 300 billion in assistance for small businesses, a new direct payment of up to $ 600 for American adults, and a $ 300 per week supplement in unemployment insurance by mid-March 2021. Speaking on the subject, US Treasury Secretary Steven Mnuchin said:
The good news is that this is a very, very fast way to monetize the economy. People will get their money early next week.
As the government aimed to help its citizens in these aid packages, the increasing pressure of the US dollar caused the reserve currency to depreciate. The dollar has lost more than 10% against the euro since March alone.
Numerous prominent economists have warned that these measures would eventually lead to high inflation rates and the death of the dollar. Peter Schiff went even further and said that hyperinflation was out of the question.
Cryptocurrency community is optimistic: Bitcoin could be positively affected
That’s why the cryptocurrency community took the opportunity to highlight one of the key differences between fiat currencies and Bitcoin. While governments show that they can print new money in the blink of an eye, the primary cryptocurrency has a limited supply of 21 million tokens.
However, the community has always emphasized this huge difference. What was more appealing in this case was that leading traditional investors outside of the crypto industry began to notice this and began to fund BTC.
Hedge fund manager Paul Tudor Jones III was among the first. Stanley Druckenmiller followed soon after. Companies and institutions such as MicroStrategy, Ruffer Investment, MassMutual, One River Asset Management, Guggenheim and more have done the same.
They thought that BTC could act as a safeguard against governments’ policies, and compared it to gold, the ultimate storehouse of assets.
As a result, it will be interesting to follow whether the latest incentive package will affect Bitcoin in the same way and whether it will rush to start accumulating even more important names.