New research is suggesting that if a second round of stimulus checks are approved, the bitcoin price is likely to react positively.
More Stimulus = Higher Bitcoin
When the coronavirus pandemic first struck global markets in March of this year, bitcoin sunk down to the high $3,000 range. The asset struggled to make a name for itself the way cash and stocks did, with the former struggling due to inflation. However, many people, over time, began to see bitcoin in an entirely new light, feeling that it would potentially serve as a “safe haven” or a hedge against economic strife and potentially keep their wealth safe during moments of uncertainty.
Bitcoin has since moved beyond the $11,000 mark, garnering roughly $8,000 more in about seven months, though at one point, the world’s number one cryptocurrency by market cap was trading for well over $12,000. Still, the currency has shown great improvement in all this time, and the asset’s latest reputation has placed it in a position of greater dominance and respect.
It can be argued that one of the big things that potentially put bitcoin back on the map was the first round of stimulus checks that were first issued in April and May of this year. Following the approval of the checks, Americans who were struggling got a little bit of money back in their pockets, and they began to feel a little more confident that things wouldn’t turn out poorly.
This ultimately helped to make bitcoin stronger and more stable in the coming months, with the asset shooting up upon approval. It was during this time that the asset initially rose to about $8,000 and $9,000. It would then go on to reach $10K briefly during early May just shy of its third halving, though this spike wouldn’t last long.
However, that first round of stimulus checks saw things improving in the economy, and crypto and stocks began to surge back to their initial positions. CEO of Coinbase Brian Armstrong even reported that his exchange was seeing bitcoin purchases of approximately $1,200 each, which is how much the stimulus checks were for. It is widely whispered among crypto executives that many people utilized their stimulus funds to purchase crypto and establish a bit of digital wealth for themselves.
So Much Money Around the World
America wasn’t the only country to issue such funds to its citizens. The same behavior was witnessed in nations such as Japan and the UK, as well as several countries that are part of the European Union. This global distribution of funds helped bitcoin reach a new pinnacle on the world’s financial ladder.
The fact is that much of the stimulus money was spent rather than saved, which was what the cash was designed for. It was printed to stimulate the economy, and it looks like most people got that message and took the right action. Should another set of checks make their way into our pockets, we can expect bitcoin to see brighter days soon.