Stimulus spending bullish for crypto? The big question is whether or not stimulus spending is bullish for crypto.
UBS Bank believes that a unified government legislature (sans the Supreme Court) will smooth the path for more fiscal stimulus. Axios has reported that President-elect Joe Biden is considering a two-pronged stimulus effort – $2,000 for Americans and a tax and infrastructure spending package worth $3 trillion dollars.
The new fiscal stimulus is expected to boost inflation, weaken the US dollar, and bring more buyers and interest in inflation-resistant safe havens like Bitcoin and Gold.
Bitcoin is already in a strong bull market, courtesy of the inflation boosting efforts taken by central banks throughout the world – in particular, the US government and the Federal Reserve. These measures have pushed institutions to seek investments that offer a hedge against inflation.
Bitcoin has risen from $10,000 to just above $41,000 in the last four months. MicroStrategy is just one of the many publicly listed companies to buy Bitcoin to preserve the value of their treasury reserves.
The dollar index, which tracks the greenback’s value against major currencies, is also extending its 2020 decline on expectations for additional fiscal stimulus. The index fell to a 33-month low of 89.21 earlier this week. Gold rallied to near $1,960 per ounce, while Bitcoin has gained a mind boggling 40% since the start of the year…. 8 days ago.
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