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Bitcoin Baltic predicts the rise of cryptocurrencies after the second stimulus package

Bitcoin's rise

Bitcoin has recently reached a new ATH of $61,683, and the interest in cryptocurrencies has never been higher. Bitcoin Baltic experts believe that the unhinged money printing caused by the coronavirus pandemic is one of the main factors contributing to the ongoing crypto bull run. Will the second stimulus package cause the prices of digital assets to rise even higher?

The Covid-19 relief plan introduced by the US President Joe Biden will be worth $1.9 trillion in total. Massive amounts of money will be printed by the Federal Reserve in order to cover the tremendous expenses.

Experts at Bitcoin Baltic estimates that over 20% of all dollars in existence were printed in the year 2020 alone. The unhinged rate at which the US government prints money is alarming, and since there’s no end in sight to the relief plans and stimulus packages, the resulting inflation can be catastrophic.

The first stimulus bill worth $2.2 trillion was passed in March 2020 by the former US President Donald Trump. Soon after the bill was signed, institutional investors started to purchase large amounts of Bitcoin to serve as a hedge against increasing inflation.

Retail investors are also uneasy about the future of fiat currency, and they prefer to store value in cryptocurrencies. According to the data recently published by the payment application CashApp, in January 2021 a record-breaking number of 1 million people used CashApp to purchase BTC for the first time ever.

Traditionally, in the times of growing inflation and economic uncertainty, investors would turn to gold as the go-to safe-haven asset. However, an unexpected thing happened: although the faith in the US Dollar is decreasing, the gold market is underperforming.

According to a billionaire and long-time gold enthusiast Jeffrey Gundlach, the reason why gold is slacking is the rising popularity of cryptocurrencies. Gundlach declared that Bitcoin will likely replace gold in the role of a “stimulus asset” - the asset most likely to be purchased by the investors willing to spend their stimulus relief funds.

A similar opinion was recently voiced by one of the most well-known Bitcoin proponents, Tyler Winklevoss. Winklevoss believes that the massive stimulus package is an “advertisement for Bitcoin”, and that investors alarmed with the unrestricted money printing will immediately use the stimulus money to purchase cryptocurrencies.

Recently, the Japanese investment company Mizuho Financial Group has conducted a survey among American investors, intended to assess what they plan to do with the stimulus funds. According to the survey, even as much as $24 billion from the stimulus bill could be funneled into Bitcoin, which would cause the BTC market cap to grow by 2-3%.

For the time being, the government keeps ignoring the rising inflation and pretends that unhinged money printing won’t lead to any problems in the future. However, investors seem to be well aware of the bleak future of the US Dollar, and cryptocurrencies are looking to become the greatest beneficiaries of Joe Biden’s $1.9 trillion stimulus package.

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Emily Whales