United States President Donald Trump signed the $900 billion pandemic relief bill on Sunday night, effectively adding to the mountain of Federal Reserve debt which could be a further catalyst for the Bitcoin (BTC) price to continue its sensational rally.
Bitcoin’s weekend price rally saw the cryptocurrency surge to a new all-time high of $28,387 before a slight correction which saw BTC close the week nearly 12 percent higher. As Bitcoin now moves sideways under the $27,000 resistance and begins to show signs of fatigue, the President signing off on the new $900 billion dollar stimulus could reignite its upward momentum.
While President Trump had originally rejected the bill—objecting to the size of direct payments to Americans and demanding an increase from $600 to $2,000 per adult—he has since changed his mind and saved Wall Street from a catastrophic week. The President has continued to push for a vote on an increase to $2000 but it appears unlikely Republicans in the GOP will approve.
In a statement, President Trump said:
“I am signing this bill to restore unemployment benefits, stop evictions, provide rental assistance, add money for PPP, return our airline workers [back] to work, add substantially more money for vaccine distribution, and much more”
Trump Approves Stimulus – Bitcoin Rising
Following the President signing off on the stimulus legislation, markets have begun the new week on a positive note, with slight gains seen on S&P 500 futures.
After signing the $900 billion stimulus bill, President Trump tweeted:
“Good news on Covid Relief Bill. Information to follow!”
On the President’s tweet, Bitcoin immediately began to climb from its daily low of $26,450 to around $27,339. The price of traditional safe-haven asset gold has also spiked and is set to make its biggest one-year gain in the last ten years.
As stimulus efforts continue to put crippling pressure on the US dollar, the Bitcoin price could see an added surge as institutional and retail investors look to store their wealth in safe haven assets. Bitcoin has enjoyed closer comparisons to gold as store of value this year, and institutions are betting that Bitcoin’s scarcity in its supply of 21 million tokens can be an effective hedge against the loss of purchasing power in the world’s most dominant fiat currency.
Matt Hougan, the chief investment officer of Bitwise Asset Management, told Bloomberg his bullish outlook for Bitcoin on the back of the stimulus bill:
“What’s happening now—and it’s happening faster than anyone could ever imagine—is that Bitcoin is moving from a fringe esoteric asset to the mainstream […]f it’s going mainstream, there is just so much money on the sidelines that is going to have to come in and establish a position that leaves me very bullish for 2021.”
Stimulus Could Boost Retail Investment
After the Black Thursday market crash in March 2020, the Bitcoin price plunged to around $4,000 falling with the traditional markets.
As the Federal Reserve’s money printer sprang into action, sending out $1200 in stimulus checks, Bitcoin (BTC) began to rise, US citizens were reportedly turning to the cryptocurrency in a mix of lost faith in their government’s monetary policy and in an effort to hold on to their wealth as the US dollar weakened.
Overall the new stimulus bill will cost exactly $908 billion and will mean more money printing by a state that is already trillions of dollars in debt. The faster the government prints the more inflation will spiral out of control, which puts a very high price on the meager $600 dollars.
Following the first round of stimulus after Black Thursday, Brian Armstrong, the CEO of US-based crypto exchange Coinbase, soon revealed data showing that a spate of $1,200 deposits similar to the stimulus checks being offered to Americans by the government were skyrocketing at the leading US crypto exchange.
While this round will only provide a $600 dollar direct payment—if the stimulus check spending of US citizens in the first round of government-funded economic emergency relief this year is anything to go by, there appears to be a high possibility that many stimulus recipients will opt to invest in Bitcoin and provide a further boost to the crypto’s bullish price momentum.