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$3 Trillion Stimulus May Fuel Bitcoin Prices

February 21, 2021 at 13:17 by Ibrahim Anifowoshe

America’s economic policies and activities may contribute to Bitcoin price bullishness. A $1.9 trillion fiscal stimulus bill reported by the Washington Post suggests that lawmakers are already discussing another $3 trillion stimulus package. It appears that the newly sworn in Biden administration is giving an aggressive push to Bitcoin.

Due to the slowdown of economic activities caused by the COVID-19 pandemic, the Federal Reserve has resorted to printing money. While this pumping of money into the economy might be good for the Americans, it is good news for Bitcoin investors.

As the massive liquidity pump is debated at the American senate, fears of inflation and currency devaluation are now pushing institutional and corporate investors to diversify into Bitcoin more than ever. Bitcoin currently trades at $57,168, gaining 0.23% in the last 24 hours.

Morgan Creek Digital founder, Anthony Pompliano, noted on Twitter that the $3 trillion proposed stimulus package is grave danger.

He said:

A few elected officials are now proposing an additional $3 trillion stimulus package on top of the $1.9 trillion COVID package. These maniacs are going to print so much money that we’re literally going to lose count. How the hell can you not be bullish on bitcoin right now?!?

U.S. Treasury Secretary Janet Yellen once again called Bitcoin, in an interview with CNBC’s Closing Bell, a “highly speculative” asset and a “vehicle for illicit transactions.” However, this is common rhetoric among lawmakers around the world. Nigeria recently also placed a ban on cryptocurrency transactions. India is also gearing for a similar ban.

In response, Rich Dad Poor Dad author Robert Kiyosaki responded on Twitter, noting that fiat currencies around the world have also been used for criminal activities.

Corporates and big investors do not mind

With the downside of inflation staring big companies and institutional investors in the face, Bitcoin has become a safe haven. They are all moving capital into the benchmark cryptocurrency to act as a potential hedge asset class.

Tesla’s purchase has continued to make headlines. The electric motor maker announced its $1.5 billion BTC purchase earlier in the month. Elon Musk later clarified that it was necessary to invest in Bitcoin at a point when fiat currency has a negative interest rate.

The world’s largest asset manager, BlackRock also announced that they are getting involved with Bitcoin. The chief Investment officer, Rick Rieder told CNBC that:

We’re holding a lot more cash than we’ve held historically. “It’s because duration doesn’t work, interest rates don’t work as a hedge and so diversifying into other assets makes some sense. Holding some portion of what you hold in cash in things like crypto seems to make some sense to me, but I wouldn’t espouse a certain allocation or target holding.

As the corporate world continues to dabble into Bitcoin, investors have begun to move their coins out of on spot exchanges into private wallets. Today, popular Twitter handle, Bitcoin Archive mentioned that $256 million in BTC was just moved from the Coinbase exchange platform into cold storage.

As investors get bullish, fears of shortage of BTC supply continue to mount.

If you have any questions and comments on Bitcoin today, use the form below to reply.

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