How Could It Affect Bitcoin?
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While the COVID-19 pandemic has slowed down markets worldwide, especially the US stock market, several investors and traders went after alternative assets and options that could provide them a better store of value.
The United States Senate approved by a 50-49 party-line vote a $1.9 trillion coronavirus stimulus check, a plan already announced by Joe Biden at the beginning of January. This COVID-19 package relief includes the third round of stimulus checks that will be passed to president Biden, with a deadline of March 14 to make changes to the package before Biden gets to it.
What Does the COVID-19 Package Relief Plan Provide?
The COVID-19 package relief will include a series of direct payments to help boost the economy, hit by the coronavirus pandemic in 2020:
- Americans making over $75,000 per year will receive direct payments of $1,4000.
- Jobless Americans will receive $300 per week
- Couples who make over $150,000 will receive $2,900 as a household check
- One year increase to Child Tax Credits, which is a tax credit check that could be worth up to $2,000, depending on the income of households.
Why Is This Vital for Crypto?
- Investing in crypto: Americans are one of the most active cryptocurrency advocates in the world. While financial institutions and politicians are still debating and giving uncertain weather for cryptos, a good percentage of the population are trading or investing in them in some way, especially, Bitcoin. If Americans who received the check start using that money to invest in cryptocurrencies, the crypto market would likely see a boost by mid-year.
- Inflation: Stimulus Checks also mean more money issued —meaning, more money printed. The more money is printed, the higher the inflation as the value of fiat decreases. This is also another vital point for Bitcoin and most cryptocurrencies.
- Hedge against inflation: While the COVID-19 pandemic has slowed down markets worldwide, especially the US stock market, several investors and traders went after alternative assets and options that could provide them a better store of value.
When institutional investors and companies, like PayPal, Grayscale, and Tesla, started hoarding Bitcoin, many realized that BTC together with several altcoins, changed from just being a medium of exchange to become a better hedge against value decreasing fiat.
While the weather in the US is uncertain regarding cryptocurrencies, this would likely act as a boost for most digital assets, reaffirming the need for better financial methods as changes are taking place in the world, and most economies can’t rely on the same classical methods of printing money every month for citizens.
Back in February, Janet Yellen made several mixed statements about crypto, specifically, Bitcoin, calling it a “special concern” by outlining how crypto-assets are being used for “shady businesses”. Yellen added that Bitcoin and other cryptos can be used for financing terrorism, but a report by Chainalysis highlighted how Bitcoin only accounts for 0.34% of terrorism-related transactions, keeping the US dollar as the preferred currency chosen by terrorists.
In the last 24 hours, Bitcoin has recovered 0.50% in price, trading in volumes of $49k, with a decent bullish index showing demand is still strong.
I’m a finance journalist and copywriter with a keen interest in the fintech field. I have keen on blockchain technology and cryptocurrency and I believe it can reshape the way we see money and financial freedom.
