Bitcoin could soon rebound – Biden considers massive aid package
Bitcoin investors looking to profit from Joe Biden’s presidency have received another bullish update from the Oval Office: a $3 trillion government spending package.
According to two White House sources, Biden is considering implementing a plan by his top advisers to boost infrastructure, clean energy, child care and education with another stimulus. The additional fiscal Bitcoin Evolution support, which follows the US president’s $1.9 trillion coronavirus aid, would address structural inadequacies affecting the US economy.
„Relief is on the way thanks to the American Recovery Act, and @POTUS [the president] is focused on rebuilding our economy better, and ideas he talked about on the campaign trail, from investing in infrastructure to taking care of making sure the tax code rewards work, not wealth,“ White House press secretary Jen Psaki said on Twitter on Monday.
„[His] focus will be on jobs and making life better for Americans,“ she added. „He is considering a range of options, scopes and sizes of plans and will discuss them with his policy team in the coming days. Still, speculation is premature as @POTUS doesn’t plan to release more details this week.“
Will another bitcoin boom follow?
The money injections, coupled with the Federal Reserve’s continued money supply, are expected to increase inflation, making hedging assets like bitcoin more attractive.
More tailwinds for the cryptocurrency could emerge as the US Federal Reserve continues to tolerate inflation above 2 per cent, meaning it would not introduce rate hikes to contain it. The Fed keeps the key interest rate near zero and plans to keep it there until 2024.
Bitcoin does well in an ultra-low interest rate environment because it puts pressure on the dollar. For example, the US dollar index, a barometer measuring the greenback’s strength against a pool of top foreign currencies, fell more than 12 per cent from its peak in March 2020 after the Fed introduced its super-low interest rate policy.
Over the same period, Bitcoin’s exchange rate (go to Plus500 Bitcoin buying guide) rose by more than 1,500 per cent against the dollar.
Advantages for Bitcoin
If the dollar falls, US stocks bought and sold in that currency would be worth less to foreign investors. Companies with massive cash holdings would also see their balance sheets lose value. Bitcoin (to buy bitcoin cheap platform comparison) could turn out to be an insurance investment for companies looking to offset the risks of dollar devaluation.
After winning a crucial Senate race, Biden, a Democratic leader, now controls both the House and the Senate.
This should allow him to pursue aggressive spending plans despite possible opposition from Republicans. The president wants to finance the packages in part by raising corporate taxes from 21 per cent to 28 per cent and individual taxes on Americans earning more than $400,000 a year.