The Biden administration’s upcoming plan to flood the US economy with trillions of dollars could lead to the next phase of the Bitcoin (BTC) beef market as more investors seek refuge from the lower US dollar.

Axios, an Arlington-based news portal, reported Thursday that Joe Biden has asked Congress to give Americans a $ 2,000 stimulus to compensate for the economic devastation of the Covid-19 virus. The new president has also offered $ 3 trillion in tax and infrastructure packages as part of his Build Back Better program.

Biden doubled the demand for more direct aid to Americans after a disappointing employment report on Friday showed that 140,000 jobs were lost in December.

He said:

“Economic research confirms that in an environment like the current crisis, especially with low interest rates, taking immediate action – even when funding is scarce – will help the economy.”
If 2020 remains past, a new wave of stimulus could be another catalyst for bitcoin as more money floods the market and asset prices.

Even Republican Donald Trump is no stranger to massive public spending. Under his leadership, the United States approved a massive $ 2 trillion stimulus project in March. Trump also signed a $ 900 billion bailout package last month that would pave the way for $ 600 in honor checks.

The federal government’s inflation policy coincided with record interventions by the Federal Reserve, which in 2020 invested trillions of dollars in tackling the liquidity crisis and keeping interest rates under control overnight.

This year, the Federal Reserve’s balance sheet has increased dramatically.
While these guidelines provided strong support for risky assets – a category that previously included Bitcoin – the new story about BTC is that it is a hedge against inflation.

This is confirmed not only by the historical performance of Bitcoin over the past 11 years, but also by the new wave of institutional money entering the market. Institutions buy bitcoins with an obvious purpose, and they may one day become the “big hackers” in the industry.

Bitcoin digital gold has become one of the biggest catalysts for the institutional transition to BTC. This story helped Bitcoin grow 300% by 2020, and the price has doubled in the past three weeks. This trend may intensify in 2021 as the purchasing power of the dollar continues to decline.

Even JPMorgan Chase acknowledged that Bitcoin is taking market share in gold, and it is a traditional haven. Bitcoin was valued at more than 22 grams of gold on Friday, a new record.

Source: CoinTelegraph