As Biden preps $3T stimulus, Bitcoin could be set to erupt

The incoming Biden administration’s plan to flood the U.S. economy with trillions of dollars could ignite the next leg of the Bitcoin (BTC) bull market, as more investors seek refuge from a crumbling United States dollar. Axios, an Arlington-based news outlet, reported Thursday that Joe Biden has asked Congress to provide Americans with $2,000 in stimulus payments to help offset the economic devastation of Covid-19. The incoming president has also proposed a $3 trillion tax and infrastructure package as part of his “Build Back Better” program. Biden doubled down on his call for more direct relief to Americans following Friday’s disappointing jobs report showing a loss of 140,000 positions 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 anything to go by, the new tidal wave of stimulus could be another catalyst for Bitcoin as more money floods the market and makes its way into asset prices.

Even Donald Trump, a Republican, was no stranger to vast government outlays. Under his leadership, the United States passed a historic $2 trillion stimulus bill in March. Trump also signed a $900 billion relief package last month that would pave the way for $600 stimulus checks. The federal government’s inflation-boosting policies have coincided with record intervention from the Federal Reserve, which deployed trillions of dollars in 2020 to combat a liquidity crisis and keep overnight rates under control.

Although these policies provided a strong backstop for risk-on assets – a category that has included Bitcoin in the past – the emerging narrative surrounding BTC is that it’s a hedge against inflation.

As Biden preps $3T stimulus, Bitcoin could be set to erupt, Cointelegraph, Jan 15