The US Senate has approved a new stimulus package worth nearly $900 billion, including $300 billion for small businesses and direct payments of up to $600 for American adults. With the total economic relief amount surpassing $3 trillion since the start of the COVID-19 pandemic, the question remains if these developments are inadvertent promotion for bitcoin.
As the unexpected outbreak of the COVID-19 pandemic infiltrated the Western World earlier this year, most countries initiated full lockdowns to fight the spread of the virus. However, the unintended consequences harmed global economies and people’s businesses and personal finances.
Being the world’s largest country by nominal GDP, the US decided to help its citizens by signing a massive $2.2 trillion Cares Act in March. Several months later, though, the aftermath of the virus hasn’t disappeared, and the US Senate began discussing another deal, which became official.
The Republican-controlled Senate voted 92-6 in favor of this second-largest economic relief package in US history. The House, controlled by the Democrats, voted 359-53 to approve it. President Donald Trump still has to sign the bill into law.
The package includes $300 billion in small business relief, a fresh round of direct payments of up to $600 for American adults, and a $300 per-week top-up in unemployment insurance until mid-March 2021.
“The good news is this is a very, very fast way of getting money into the economy. People are going to see this money at the beginning of next week.” – said US Treasury Secretary Steven Mnuchin.
While the government aims to help its citizens with these relief packages, the increased USD printing has pushed the world’s reserve currency to depreciate. The dollar has lost over 10% of value against the Euro since March alone.
Numerous prominent economists warned that these measures will ultimately lead to high inflation rates and the demise of the greenback. Peter Schiff went further and said that even hyperinflation is not out of the question.
As such, the cryptocurrency community used the opportunity to highlight one of the most significant differences between fiat currencies and Bitcoin. While governments showed that they could print new money with the blink of an eye, the primary cryptocurrency has a limited supply of 21 million coins ever to exist.
However, the community has always been highlighting this major difference. What was more compelling in this situation is that prominent traditional investors outside of the crypto industry began noticing it and started allocating funds into BTC.
Hedge fund manager Paul Tudor Jones III was among the first. Shortly after, Stanley Druckenmiller followed. So did corporations and institutions such as MicroStrategy, Ruffer Investment, MassMutual, One River Asset Management, Guggenheim, and more.
They reasoned that BTC could serve as a hedge against the governments’ policies and compared it to the ultimate store of value asset – gold.
Consequently, it will be interesting to follow if the latest stimulus package will affect bitcoin in the same way and rush even more prominent names to start accumulating.