Bitcoin price hits $51K as U.S. Senate passes $1.9 trillion stimulus

0
79

Bitcoin (BTC) price hit over $ 51,000 on March 7, after the U.S. Senate passed the expected $ 1.9 trillion stimulus bill, roughly twice its market cap from BTC.

United States President Joe Biden said the Senate approval shows great strides in delivering a “much needed” stimulus package to Americans. He said:

“Today I can say that we have taken another big step forward in fulfilling this promise. That help is on the way. It wasn’t always nice, but it was so badly needed, badly needed. “BTC / USDT 4-hour price chart (Binance). Source: TradingView.com

Why is the Bitcoin price incentive bullish?

If a stimulus package is passed, US financial conditions will be eased immediately. The past year has shown that the impact of such measures is increasing investor appetite for risky assets, including stocks and cryptocurrencies.

In April 2020, when the first economic stimulus plan was passed, it coincided with a massive uptrend in both the U.S. stock market and the cryptocurrency market.

Of course, investors expect the second stimulus package to have a similar impact on Bitcoin price in the short term.

Peter Brandt, a longtime trader, said the devaluation of the US dollar’s purchasing power has only just begun.

The combination of a depreciating dollar and the new stimulus package would likely improve market sentiment around Bitcoin. Brandt wrote:

“The devaluation of the purchasing power of the US dollar DX_F has only just begun. As a result, Bitcoin $ BTC, real estate, US stocks and commodities will continue to rise when expressed in USD fiat.”Consumer price index for all urban consumers. Source: Peter Brandt, Fred

If the U.S. stock market begins to rebound after a week-long pullback, it could further catalyze Bitcoin as stocks and cryptocurrencies fell concurrently during the recent correction.

Chinese companies are following MicroStrategy’s strategy?

On the improving macro environment for Bitcoin, the first Chinese public company named Meitu has officially purchased Bitcoin and Ethereum worth $ 40 million. The company stated:

“On March 5, 2021, the group purchased 15,000 units of Ether and 379.1214267 units of Bitcoin (BTC), both cryptocurrencies, in open market transactions for a total of approximately USD 22.1 million and USD 17.9 million, respectively.”

“The first Chinese public company that bought a large amount of bitcoin has appeared,” commented a popular Chinese journalist named Wu Blockchain on March 7th. However, the founder has been criticized for issuing multiple ICOs in 2017. ” He added:

Meitu said that crypto has enough room for appreciation and can diversify the risk of holding cash in fund management. Affected, more Chinese companies could buy bitcoin to boost their share prices, but they could also be banned by the Chinese government. “

If a new trend emerges for public companies in Asia to start buying Bitcoin, it could lead to an influx of new capital into the Bitcoin exchange market.

While the uncertain regulatory environment makes it unlikely that many publicly traded companies in China will announce Bitcoin purchases, a similar trend could emerge in countries like Japan and South Korea in the next few months.