After several weeks of calm in the Bitcoin market, the world’s leading cryptocurrency increased its value by more than $ 200 in just a few hours. Standing at $ 11,348 at the time of this writing. Which has led analysts to speculate on what could be behind the behavior of the cryptocurrency. Suggesting that the price of Bitcoin could be growing due to stimuli from the US government.
US government stimuli
The Coronavirus, in addition to being one of the worst humanitarian catastrophes of the last century. It has also been a real tragedy in economic terms. Bringing the economies of the world’s leading nations to their knees, and leading to a situation where, to try to avoid a total collapse of industry and commerce, governments have had to intervene.
Thus, since the pandemic reached the Western world, the US government has poured billions of dollars into the economy. What has led the American financial market to live a boom time. Even at a time when most of the economy is paralyzed, due to the necessary measures of social distancing.
However, and despite representing hundreds of millions of dollars in public spending. The stimuli carried out by the Donald Trump government have not been enough. Causing a new round of multi-million dollar stimulus to be negotiated between the United States Congress and the Department of the Treasury.
The result of the tug of war between Democrats and Republicans regarding aid to face the Coronavirus has been the offer by the Donald Trump government of a stimulus package for 1.8 trillion dollars. A figure that, according to crypto market analysts, could have driven the price of Bitcoin.
Bitcoin price reacts
This impact of the stimulus package offered by the Trump administration on the price of Bitcoin is due to the dynamics of the financial system. Well, as was proven in previous government interventions against the pandemic. The entry of fresh dollars into the economy, benefits first and foremost the financial market.
So it makes sense for Bitcoin investors to expect that this new multi-billion dollar stimulus will lead to billions of dollars entering the BTC market. Especially after the experience of the increase in the acquisition of cryptocurrencies by Grayscale, after the last package of government aid.
Likewise, a final factor that could have driven the price of Bitcoin is, according to Bloomberg analyst Mike McGlone, the prospect of an electoral victory for Joe Biden in the US presidential elections:
«A potential presidency of Biden should favor a greater appreciation of the price of #Bitcoin. The new leadership could change the Trump administration’s hands-off policy – to the detriment of the expanding crypto market – and push Bitcoin into the mainstream, improving the chances of an ETF.«.
In this way, the influence that US policy has on the price of Bitcoin is clear. Leading to both Donald Trump’s stimulus plan, and the possible outcome of the November 3 elections, have had a significant impact on the cryptocurrency.