Biden’s fiscal stimulus plan could cause the price of Bitcoin to soar.

The incoming Biden administration’s plan to inject the US economy with trillions of dollars could trigger the next stage of the Bitcoin (BTC) bull market, as more investors seek refuge from a crumbling US dollar.

Axios, an Arlington-based media outlet, reported Thursday that Joe Biden has asked Congress to provide Americans with $2,000 in stimulus payments to help offset the economic devastation of the Covid-19. The incoming president has also proposed a $3 trillion tax and infrastructure package as part of his „Build Back Better“ program.

Chamath Palihapitiya sees Bitcoin as insurance against global uncertainty
Biden doubled his call for more direct relief for Americans after Friday’s disappointing job report showed a loss of 140,000 jobs in December.

He said:

„Economic research confirms that with conditions like today’s crisis, especially Bitcoin Bank with such low interest rates, taking immediate action – including deficit financing – will help the economy.
Judging by the year 2020, the new wave of stimulus could be another catalyst for Bitcoin as more money is injected into the market and influences asset prices.

Pension funds are investing in Bitcoin, according to Grayscale’s new CEO
Even Donald Trump, a Republican, was no stranger to encouragement. Under his leadership, the United States passed a historic $2 trillion stimulus bill in March. Trump also signed a $900 billion aid package last month that would prepare the wave of $600 stimulus checks.

The federal government’s inflationary policies have coincided with a record intervention by the Federal Reserve, which released trillions of dollars in 2020 to combat a liquidity crisis and keep overnight interest rates under control.

The Federal Reserve’s balance sheet has increased this year.
While these policies provided strong support for risky assets – a category that has included Bitcoin in the past – the emerging narrative surrounding BTC is that it is a hedge against inflation.

This is supported not only by Bitcoin’s historical superior performance over the past 11 years, but also by the new wave of institutional money entering the market. Institutions are buying Bitcoin with a clear purpose, and may one day become the industry’s „mega HODLers“.

Pension funds are investing in Bitcoin, according to Grayscale’s new CEO
Bitcoin’s digital gold narrative has been one of the major catalysts for institutional change towards BTC. This narrative helped drive the 300% increase in Bitcoin’s price in 2020 and its price has more than doubled in the last three weeks. This trend could intensify in 2021 as the purchasing power of the dollar continues to erode.

Even JPMorgan Chase has acknowledged that Bitcoin is taking market share from gold, the traditional safe haven asset. On Friday, one Bitcoin was worth the equivalent of more than 22 ounces of gold, a new all-time high.