In the past few weeks, the entire world, including the Bitcoin industry, has been disrupted by the outbreak of the coronavirus COVID-19. In fact, to mitigate the spread of COVID-19, authorities were forced to take emergency measures, which closed thousands of businesses and left millions of people globally unemployed. In short: the economic impact is huge.
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It's no surprise, then, that the government was forced to respond. Canada announced a CAD 82 billion stimulus package, the European Central Bank expanded its large-scale asset purchase business, and Hong Kong promised to distribute HK $ 10,000 to each of its citizens.
But the United States plays even bigger.
White House economic adviser Larry Kudlow announced at a news conference on March 24 that he believes the US government's economic stimulus plan "will reach about $ 6 trillion."
The report shows that $ 2 trillion (of which the U.S. Senate has approved the plan as of press time) will be paid directly to companies and individuals suffering under the pressure of a corona virus outbreak, and the remaining $ 4 trillion will go to the Federal Reserve.
To illustrate exactly how amazing this $ 6 trillion is, we can see from this: $ 6 trillion is equivalent to one-third of the entire US GDP and 130% of the Fed's balance sheet, enough for the planet Each of them has $ 850 in funds, or 900 million bitcoins can be purchased at current prices-of course there are not 900 million bitcoins in total.
Good for Bitcoin
Although none of these stimulus measures will be directly applied to Bitcoin, analysts believe that the money will only greatly increase the value proposition of Bitcoin and other cryptocurrencies.
Well-known market analyst and podcaster Preston Pysh recently commented on the importance of the US trillion-dollar economic stimulus policy to Bitcoin in a podcast with Morgan Creek Digital founder Anthony Pompliano.
Regarding the thousand-dollar checks that the U.S. government is about to issue to U.S. households, Pysh noted that many millennials are preparing to distribute a significant portion of these checks to Bitcoin as they see the technology and the fleetingness of this scarcity The value of a reliable digital currency in your digital world.
More broadly, analysts believe that this stimulus could drive inflation rates similar to those seen after the abolition of the gold standard.
In a recent report, BitMEX Research wrote that given the influx of monetary and fiscal stimulus that has already begun, Bitcoin is likely to appreciate significantly:
"We believe that in this changing economic system, the economic and financial markets are in a loose state, with no important anchors at all, and even no specific inflation targets, which may be what Bitcoin has seen in its short history Best chance. "
Su Zhu, chief information officer and CEO of Three Arrows Capital, supports this. According to previous reports, investors believe that the U.S. dollar is on the road to inflation and is "difficult to fall back", which is likely to be a factor that prompted Bitcoin to rebound to "$ 50,000" at a relatively rapid rate.
On March 24, driven by the US economic stimulus plan, the global stock market and the crypto market rose collectively. Bitcoin rose by more than 16%, and once approached $ 6,900.