Bitcoin is back above $ 50,000 after the Senate passed and approved Biden’s $ 1.9 trillion stimulus package.
Bitcoin (BTC) currency starts the week with an excellent start as it trades above the $ 50,000 resistance level, after news that the US Senate has passed President “Joe Biden” $ 1.9 trillion stimulus package to counter the Coronavirus.
At the time of writing this article, the cryptocurrency is trading at $ 5,049.63 with a daily gain of 0.56%, its highest over the weekend based on data sourced from Coingecko.
Stimulus packages and bitcoin price hike:
The stimulus packages rolling out has a proven track record of increasing Bitcoin prices.
The underlying economics is simple, as the stimulus involves printing a lot of fiat currencies that increase the amount of money in circulation.
Inflation comes with this increased circulation, which reduces the purchasing power and the total value of the fiat currency, in this case we are talking about the global currency, the US dollar.
Citizens and businesses alike will not want to fall into the trap of a depreciating dollar over time, and thus they are ready to explore options to help protect their holdings from inflation.
This is where gold and Bitcoin come into play.
Although the appetite for Bitcoin is still under discussion, Bitcoin has recently gained increasing reliance over the past year as a better store of value and hedge against inflation.
Stimulus packages can also be used by some citizens to buy bitcoins, and we may see an increase in the flow of funds into digital currencies as the incentive checks begin to be delivered.
Companies like Micro Strategy, which have a proven track record of strategically investing shareholder money in bitcoin, may find new reasons to increase their overall stakes in bitcoin.
The flow of money into Bitcoin is bound to increase its price over time.
The digital currency is already responding to this possibility with the growth it has achieved in past periods.
Bitcoin is expected to reach the target of $ 58,000, which is the highest level in the previous currency, and in the event of accelerating the distribution of stimulus checks, we may see Bitcoin reach new highs before the end of the first quarter of 2021.