The Bitcoin rally continued during Thursday’s European session as traders ignored the political turmoil in Washington to instead focus on the potential for higher government spending.
The BTC / USD exchange rate hit a new record high of $ 38,180, adding 10 percent to the unstoppable upward trend seen over the past four quarters. While the pair later trimmed some of those gains, general excitement over risky markets indicated that it would continue to post gains in the upcoming US session.
Bitcoin closes above $ 38,000 in the latest intraday rally. Source: BTCUSD on TradingView.com
Bitcoin closes above $38,000 in the latest intraday rally. Source: BTCUSD on TradingView.com
Investors’ optimistic outlook for Bitcoin has further improved after Democrat Jon Ossoff’s victory in the second of two runoff elections in the Georgia Senate. The seats took control of the US Senate to the government of President-elect Joe Biden. This raised hopes for additional stimulus to the US economy, starting with direct aid worth $ 2,000 to deserving Americans.
A joint session of Congress on Thursday morning also confirmed a clear victory for Mr Biden. In the meantime, outgoing President Donald Trump agreed to an “orderly transfer of power” after rejecting it since Biden’s leadership in the US president’s race.
“We now assume that we have avoided a deadlock and that the economy will have more fiscal support than less in the coming year,” Christopher Smart, chief strategist at Barings, told the Wall Street Journal.
Bitcoin to the moon
It appears that bitcoin traders were optimistic about the general political update.
The cryptocurrency rose nearly 900 percent after hitting its bottom below $ 4,000 in March 2020. The gains were most evident after the Federal Reserve announced an open-ended program to buy government and corporate debt and decided to cut policy rates to near zero.
Meanwhile, the U.S. government approved a $ 2.3 trillion stimulus package for American households and businesses suffering from the economic fallout from the coronavirus pandemic. In December 2020, the White House passed a further $ 900 billion in aid against Democratic calls for “at least $ 2 trillion.”
“When it comes to young people’s hands, they go straight to their accounts,” said Mike Novogratz, CEO of Galaxy Investment Partners, of the momentum that drives market gains. “One of the most unique things last time was seeing how many people bought Bitcoin with the exact amount of stimulus. Boom. Boom.”
Institutional investors are also involved in the Bitcoin market and believe the strategy would protect their portfolio as their cash reserves depreciate in value. Hedge fund veterans like Paul Tudor Jones and Stan Druckermiller bought a small portion of Bitcoin in 2020.
In the meantime, companies like MassMutual, MicroStrategy, Square and Ruffer Investments have bought Bitcoin against their fears of inflation.