The U.S. Senate approved $1,400 checks for Americans and at the same time Bitcoin (BTC) reached $51,000. On March 7, after the U.S. Senate passed the much awaited $1.9 trillion stimulus package, the price of BTC went above $51,000. This stimulus package is approximated to be twice as large as BTC’s market capitalization.
President Joe Biden said that this approval from the Senate is an indicator of progress as the American people had anticipated for this stimulus bill for long. The U.S. President added, that this was a giant step towards delivering on the promise that help was on its way to liberate the Americans through his government. The President claimed that this is not a pretty move but it was desperately and urgently needed.
Passing of a stimulus bill means the relaxation of financial constraints for the American population. Taking an example of last year’s stimulus package, one can see that with it comes an increase in confidence for the investors as their confidence for taking on risk-on assets such as cryptocurrencies and stocks rises.
The first stimulus bill of April 2020 brought with it a massive bull run for both the crypto sphere as well as the U.S. equities market. Therefore, it is only natural for investors to expect a similar situation on the short term BTC price during this second stimulus package.
A famous trader, Peter Brandt, claimed that this is only the beginning of the devaluation of the U.S. dollar’s purchasing power. The combination of this new stimulus package with this dollar devaluation will cause the market’s approach towards BTC to improve exponentially. Brandt added that this devaluation of the USD’s purchasing power have a positive effect on BTC, real estate, U.S. equities, and commodities as they will maintain an upward trend, so long as they get expressed in $USD fiat terms.
As BTC’s macro environment improves, a company called Meitu – the first Chinese listed company – officially purchased over $40 million worth of Bitcoin and Ethereum. In an official company statement, they claimed that on March 5, 2021, the group bought 379.1214267 units of Bitcoin (BTC) and 15,000 units of Ether both cryptocurrencies. These were both open market transactions worth approximate aggregate considerations of US$17.9 million and US$22.1 million respectively.
This goes to show that Meitu is confident that the crypto space has room for growth. If this turns into an Asian companies’ trend where they invest heavily in cryptocurrencies, the BTC exchange market will boast of an influx of new capital.
Image courtesy of pixabay
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