Bitcoin leans higher as Pelosi signals year-end stimulus bill
Bitcoin posted modest gains on Thursday when Democratic leaders signaled that they would reach an agreement with Republicans to pass the second round of the COVID-19 stimulus before the end of the year.
House Speaker Nanci Pelosi (D-Califonia) said Wednesday that a new $ 908 billion bipartisan aid package should serve as the basis for her months of negotiations with White House and Party leaders. Republican.
“Of course, we and others will offer improvements,” Ms. Pelosi said in a joint statement with Senator Chuck Schumer. “But the need to act is immediate and we believe that with good faith negotiations we could reach an agreement.”
Expected stimulus pump
The BTC / USD exchange rate rose 0.28 percent in the pre-trading session in New York, trading at $ 19,278, as traders saw an extended bullish move toward its recently set all-time high, just shy of the $ 20,000. A Reuters report indicated that stimulus hopes depressed the US dollar, leading to higher Bitcoin bids.
The Federal Reserve and the US government previously committed to infinite quantitative easing, along with lower interest rates and unprecedented levels of monetary and fiscal stimulus to protect the economy from the effects of the COVID-pandemic. 19. Her move caused yields on short-term debt to fall close to zero, while pushing the US dollar lower.
As a result, Bitcoin surged by more than 400 percent as investors feared inflation would return in the next few years. The cryptocurrency offered to become an alternative to gold, an established hedge against that trend.
The Bitcoin rally stalled midway between August and September 2020 when the Republican-majority Senate refused to consider the House of Democrats’ proposal for a $ 2.4 trillion bill.
However, the cryptocurrency emerged on its own after a wave of dominant corporations also backed the anti-inflation narrative. Some of them also highlighted Bitcoin as a credible competitor for the dominance of gold in the safe haven market.
Billionaire investors like Paul Tudor Jones and Stan Druckenmiller admitted that they own Bitcoin. Meanwhile, the Nasdaq-listed company MicroStrategy replaced its $ 425 million worth of cash reserves with the cryptocurrency. The global payment service Square also revealed $ 50 million in BTC on its balance sheets.
PayPal, BlackRock, Guggenheim, Visa and others also spoke about the long-term potential of Bitcoin as a payment and as a store of value asset.
Correction Will Not Hurt Bitcoin’s Bullish Bias
Bloomberg Intelligence senior commodities strategist Mike McGlone said the cryptocurrency would continue its bull run as the US fiscal deficit expands and the Fed remains subdued.
“$ 10,000 is the basis for Bitcoin 2021 for more of the same towards $ 50,000,” the analyst noted Thursday. “A decrease in risk like the one in the first quarter could return Bitcoin towards support at $ 10,000 in 2021, but we believe that the path of least resistance remains higher. The base solidified in 2020 for the benchmark.”
The cryptocurrency ecosystem is going through times of consolidation, users and investors are looking for opportunities to protect themselves from inflation, translated into the loss of purchasing power of fiat currencies, bitcoin is a good option. Waiting for new announcements
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