The Biden presidential administration is considering a $ 3 trillion bailout, will Bitcoin benefit?

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2021-03-24 17:12:00

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According to two sources from the White House, Mr. Biden is considering a new bailout package from his top advisers to promote infrastructure, clean energy, child care and education. If approved, this will be the next aid after the last $ 1.9 trillion to solve the problems affecting the US economy.

White House secretary Jen Psaki posted on Twitter yesterday:

“Relief is being offered thanks to the US Rescue Plan and the president is focused on building our economy back for the better …”

“[Ông ấy] will focus on work and make American life better, ”she added. “He looks at a range of options, ranges and sizes of plans and will discuss them with his advisory team in the coming days. However, the president is not planning to release additional details this week. ”

Cash injection, along with the Federal Reserve’s steadily growing money supply, is expected to increase inflation, raising the attractiveness of hedging assets like bitcoin.

There could also be more crypto favorable conditions as the US central bank remains committed to enduring inflation above 2%, meaning they won’t offer any rate hikes. to restrain. The Fed keeps the benchmark lending rate close to zero and wants to stay the same until 2024. Bitcoin performs well in an extremely low interest rate environment because it puts pressure on the dollar to depreciate.

For example, the US dollar index has fallen more than 12% from its high in March 2020, after the Fed introduced its super-low interest rate policy. During the same period, Bitcoin’s exchange rate against the dollar increased by more than 1,500%.

… So if the dollar falls, US stocks bought and sold with the currency will be of lower value to foreign investors. Companies with huge amounts of cash will also face a drop in the value of their balance sheets. And then, Bitcoin could emerge as an insurance asset for institutions looking to offset the risk of the dollar’s devaluation.

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