On January 14, president-elect Joe Biden announced a proposed $1.9 trillion rescue package in an effort to stimulate the United States economy and combat the COVID-19 fiscal crisis. Mr. Biden’s pandemic response will be financed completely through increased federal borrowing. The president-elect states, “The very health of our nation is at stake… [and it] does not come cheaply, but failure to do so will cost us dearly.”
Although many Americans are optimistic that the proposed rescue package will help relieve the economic downturn and aid the country towards reopening, many questions whether the short-term benefits outweigh the long-term consequences. As quoted above, Biden believes that a “failure to do so [implementing the stimulus package] will cost us dearly,” but if the rescue package is employed, will the future price paid cost us and our markets even more?
Citizens and investors, alike, may turn to cryptocurrency to hedge against inflation.
In fact, Biden’s rescue package may be the added dry powder, boosting the mass adoption of cryptocurrencies, like Bitcoin; thus, triggering the next bull run.
As more money floods the economy and heads towards crypto assets, there is expected to be an institutional shift in investing allocation. Within the last year, following stimulus check announcements and distributions, markets saw an uptick in the price and demand of Bitcoin. Although it is surprising that Biden’s stimulus package announcement did not trigger a bullish response by the Bitcoin market, many economists and analysts agree that as the dollar’s purchasing power continues to erode, Bitcoin and other cryptocurrencies will rally. A “Crypto-Nation” is approaching in the near future and Americans should get ready.