Bitcoin (BTC) price hit over $ 51,000 on March 7 after the U.S. Senate passed the expected $ 1.9 trillion stimulus bill, roughly double its market cap from BTC.
United States President Joe Biden said the Senate approval shows great strides in delivering a “much-needed” stimulus package to Americans. He said:
“Today I can say that we have taken another big step forward to deliver on that promise. This aid is on the way.” It wasn’t always nice, but it was so badly needed, badly needed. “
Why is the Bitcoin price incentive bullish?
If a stimulus package is passed, US financial conditions will be eased immediately. The past year has shown that the impact of such measures is increasing investor appetite for risky assets, including stocks and cryptocurrencies.
In April 2020, when the first stimulus bill was passed, it coincided with a massive uptrend in both the U.S. stock market and the cryptocurrency market.
Of course, investors expect the second stimulus package to have a similar effect on Bitcoin price in the short term.
Peter Brandt, a longtime trader, said the devaluation of the US dollar’s purchasing power has only just begun.
The combination of a depreciating dollar and the new stimulus package would likely improve market sentiment around Bitcoin. Brandt wrote:
“The devaluation of the purchasing power of the US dollar DX_F has only just begun. Because of this, Bitcoin $ BTC, real estate, US stocks and commodities will continue to have a higher trend when expressed in USD USD. “
If the U.S. stock market begins to rebound after a week-long pullback, it could further catalyze Bitcoin as stocks and cryptocurrencies fell concurrently during the recent correction.
Chinese companies are following MicroStrategy’s strategy?
On the improving macro environment for Bitcoin, the first Chinese public company named Meitu has officially purchased Bitcoin and Ethereum worth $ 40 million. The company stated:
“On March 5, 2021, the group purchased 15,000 units of Ether and 379.1214267 units of Bitcoin (BTC), both cryptocurrencies, in open market transactions for a total of approximately USD 22.1 million and USD 17.9 million, respectively . “
“The first company listed in China that bought a large amount of Bitcoin has appeared,” commented a popular Chinese journalist named Wu Blockchain on March 7th. However, the founder has been criticized for issuing multiple ICOs in 2017. ” He added:
“Meitu said that crypto offers enough room for value growth and can diversify the risk of holding cash in fund management. This may affect more Chinese companies buying Bitcoin to boost their stock prices, but they may also be banned by the Chinese government. “
If a new trend emerges for public companies in Asia to start buying Bitcoin, it could lead to an influx of new capital into the Bitcoin exchange market.
While the uncertain regulatory environment makes it unlikely that many publicly traded companies in China will announce Bitcoin purchases, a similar trend could emerge in countries like Japan and South Korea in the next few months.