US Stimulus Bill: The Next Bitcoin Bullish Factor
The hype within the crypto community that institutions are buying Bitcoin seems to have faded away, so what will the next bullish factor be that triggers the next rally?
In its place, most are looking into the stimulus package. This has in the past been positive for both the BTC and stock market.
During the COVID-19 pandemic, the United States introduced stimulus reliefs. This mainly targets the stock market and as a form of relief payment designed to support its citizens.
In 2020, there were two stimulus checks, one for $1,200 and another for $600. With the third, and President Biden’s first, the stimulus check is record-breaking. In the stimulus bill set to be signed by the president in the next few days, recipients are set to receive $1,400.
To try and predict the effect that the third stimulus check might have on Bitcoin, we have looked at the previous stimulus checks. Every time the checks have been disbursed, there is a market rally.
Exchange deposits support the argument that some of these checks are used to buy Bitcoin. Rightfully so as those who invested their first checks have gained over 700%. The first stimulus check was disbursed on April 15 when Bitcoin was trading for $7,000. Now Bitcoin is above $55,000. The $1,200 would now be worth $10,000 with the gains coming in under one year.
The second stimulus check proves that it is never too late to buy Bitcoin. The second stimulus check was disbursed in late December. At that time, Bitcoin was trading for $30,000. Those who invested their $600 checks at the peak of the recent rally have gained over 95%.
And the gains are not special to Bitcoin, those who invested in either Cardano or Ethereum have even recorded higher gains as the two coins have outperformed Bitcoin in that time frame.
This is proof that even at current highs, Bitcoin could still double to $100K. Notably, when the two checks were disbursed, Bitcoin was not as popular as it is now. Influential people such as Elon Musk, and institutions like Square and Tesla have now made Bitcoin the desired investment option.
The Collapse of Fiat
With the government set to print $1.9 trillion out of thin air, it’s an opportune time for Bitcoin believers to point out that Bitcoin has a limited supply.
Unlike the dollar which can just be printed, causing it to saturate and cause inflation in the long term, Bitcoin has a definite limit and has a supply cut every four years. This is a reminder that Bitcoin is better money than fiat.
The stimulus check finds Bitcoin in a slump despite trading very close to its recent high. The situation makes it ideal for buyers to accumulate. The checks are likely to trigger a buying spree that pushes Bitcoin to break above its current ATH of $58K.
Once the leading digital asset breaks its ATH and goes into price discovery, investors will likely go into a FOMOing phase. Fear of Missing Out (FOMO) is when investors flock into a promising asset to catch its high. In the next bull cycle, analysts like CryptoBirb expect Bitcoin to reach as high as $75K.