Bitcoin Surge: How Stimulus Bills Fuel Crypto Prices

Bitcoin’s Price Surges

On March 7, Bitcoin (BTC) reached stunning heights, overcoming the $51,000 mark following the U.S. Senate’s approval of a hefty $1.9 trillion stimulus bill. Remarkably, this stimulus is nearly double the current market capitalization of Bitcoin. President Joe Biden celebrated the Senate’s decision, proclaiming that help is on the way and that a giant leap has been made toward delivering much-needed relief to Americans.

The Bullish Effect of Stimulus Bills on Bitcoin

When a stimulus bill gets the green light, it often results in relaxed financial conditions across the country. Looking back, past stimulus measures have historically nudged investors toward riskier assets, including not only equities but also cryptocurrencies. For instance, April 2020 witnessed the first stimulus bill leading to a monumental bull run in both markets. Investors are optimistically hoping the second stimulus will have a similar positive ripple effect on Bitcoin prices.

Devaluation of the Dollar: An Underlying Factor

Peter Brandt, a seasoned trader, emphasized that the U.S. dollar’s purchasing power devaluation is just getting warmed up. A devaluing dollar adds to the favorable conditions for Bitcoin, real estate, U.S. equities, and commodities, all expected to trend upwards when evaluated against the USD. With this trend of devaluation, the market sentiment around Bitcoin has a reason to soar, especially with the fresh stimulus package boosting investor confidence.

Potential Stock Market Recovery

As the U.S. stock market finds its way back after a recent slump, this recovery could serve as a catalyst for Bitcoin’s uptrend. The correlation between equities and cryptocurrency means that an uptick in one typically nudges the other in the same direction. Market participants are keenly observing the stock recovery, hoping it brings an added boost to Bitcoin’s prospects.

Asian Companies Taking Note of Bitcoin

Adding to the bullish narrative, the notable Chinese company Meitu made headlines by purchasing $40 million in Bitcoin and Ethereum. Their rationale? A belief that cryptocurrencies hold substantial appreciation potential and can help diversify risks in cash management. Wu Blockchain, a notable journalist in China, remarked on this significant shift in company strategy, suggesting that if other Chinese firms follow suit, it could spark fresh investments in the crypto space despite regulatory uncertainties. Meanwhile, countries like Japan and South Korea might also embrace similar strategies soon.