Could Biden’s $3T stimulus send Bitcoin to the moon?

The Biden administration’s fiscal stimulus plan has the potential to propel Bitcoin (BTC) to record new levels.

Investors are eyeing another leg up in Bitcoin’s recent explosive rally with the U.S economy potentially being injected with trillions of dollars amidst an already collapsing United States Dollar.

Incoming president Joe Biden’s “Build Back Better” program proposes a $3 trillion tax and infrastructure package alongside $2000 in stimulus payments to American residents.

He stated:

“Economic research confirms that with conditions like the crisis today, especially with such low-interest rates, taking immediate action – even with deficit financing – is going to help the economy, long term and short term”

Last month we saw Donald Trump pass a $900 billion stimulus bill for $600 checks in addition to the record $2 trillion bill back in March in hopes of reducing the devastating impact of COVID-19.

Although the pumping trillions of dollars like this and record intervention from the Federal Reserve was done in an effort to maintain overnight rates and combat a growing liquidity crisis, certain asset prices have sky-rocketed as a result.

Last year we saw the many narratives that Bitcoin HOLDers and maximalists have been proponents of actually being tested, with BTC charging up 300% in 2020 and more than doubling in the last three weeks. Institutional demand increased dramatically as we now see Greyscale’s Bitcoin Fund (GBTC) manage over $23 billion with investments of $3.3 billion in just Q4 alone.

Whilst there was a number of different reasons as to why institutions are changing their mind on BTC, a powerful instigator is the idea of Bitcoin being digital gold and safe-haven asset. JPMorgan Chase even came out publicly announcing they believe Bitcoin has been and will continue taking market share from gold. As shown below, BTC has been making new all-time highs against gold.

Although the number of skeptics around Bitcoin haven’t decreased, the macroeconomic backdrop, inflating asset prices and change in insitutional sentiment are now definitely turning some heads.

Bitcoin could see another continuation of recent bullish trends in 2021, especially if the USD further drops down in value.

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