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Bitcoin reaches $51,000 as the U.S. Senate greenlights $1,400 "stimmy" checks for Americans.
The price of Bitcoin (BTC) reached over $51,000 on March 7 after the U.S. Senate passed the anticipated $1.9 trillion stimulus bill, which is roughly two times larger than the market capitalization of BTC.
United States' President Joe Biden said that the Senate's approval shows major progress in delivering a "desperately needed" stimulus bill to Americans. He said:
BTC/USDT 4-hour price chart (Binance). Source: TradingView.com
In April 2020, when the first stimulus bill was passed, it coincided with a massive bull run in both the U.S. equities market and the cryptocurrency market.
Naturally, investors anticipate the second stimulus package to have a similar effect on the price of Bitcoin in the short term.
Peter Brandt, a long-time trader, said the devaluation of the purchasing power of the U.S. dollar has only started.
The combination of a devaluing dollar and the new stimulus package would likely cause the market sentiment around Bitcoin to improve. Brandt wrote:
Consumer price index for all urban consumers. Source: Peter Brandt, Fred
If the U.S. stock market begins to recover after a week-long pullback, it could further catalyze Bitcoin given that equities and cryptocurrencies fell in tandem during the recent correction.
While it is unlikely that many publicly listed companies in China would announce Bitcoin purchases due to the uncertain regulatory environment, countries like Japan and South Korea could see a similar trend occur in the next few months.
The price of Bitcoin (BTC) reached over $51,000 on March 7 after the U.S. Senate passed the anticipated $1.9 trillion stimulus bill, which is roughly two times larger than the market capitalization of BTC.
United States' President Joe Biden said that the Senate's approval shows major progress in delivering a "desperately needed" stimulus bill to Americans. He said:
Why is the stimulus bullish for Bitcoin price?
When a stimulus bill gets passed, it immediately relaxes the financial conditions in the U.S. The past year has shown that the effect of such measures raises investors' appetite for risk-on assets, including stocks and cryptocurrencies.In April 2020, when the first stimulus bill was passed, it coincided with a massive bull run in both the U.S. equities market and the cryptocurrency market.
Naturally, investors anticipate the second stimulus package to have a similar effect on the price of Bitcoin in the short term.
Peter Brandt, a long-time trader, said the devaluation of the purchasing power of the U.S. dollar has only started.
The combination of a devaluing dollar and the new stimulus package would likely cause the market sentiment around Bitcoin to improve. Brandt wrote:
If the U.S. stock market begins to recover after a week-long pullback, it could further catalyze Bitcoin given that equities and cryptocurrencies fell in tandem during the recent correction.
Chinese companies following MicroStrategy's strategy?
Atop the improving macro environment for Bitcoin, the first Chinese listed company called Meitu has officially bought $40 million worth of Bitcoin and Ethereum. The company stated:"The first Chinese listed company to buy a large amount of Bitcoin appeared," a popular Chinese journalist by the name of Wu Blockchain commented on March 7. "Photo-retouching software company Meitu announced that it would buy Bitcoin and Ethereum for 40mln$. But its founder was criticized for issuing multiple ICOs in 2017." He added:
If a new trend emerges where public companies in Asia begin to buy Bitcoin, it could lead to an influx of new capital into the Bitcoin exchange market.
While it is unlikely that many publicly listed companies in China would announce Bitcoin purchases due to the uncertain regulatory environment, countries like Japan and South Korea could see a similar trend occur in the next few months.