Bitcoin Blasts above $51K after the U.S. Senate Passes $1.9 trillion Stimulus Bill

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U.S Senate passes 1.9 stimulus bill
U.S Senate passes 1.9 stimulus bill

Bitcoin (BTC) soared to over $51,000 Sunday morning after the U.S. Senate passed the long-awaited $1.9 stimulus bill. Pres. Joe Biden said that the approval is an important step to 

“Today I can say we’ve taken one more giant step forward in delivering on that promise. Help is on the way. It wasn’t always pretty, but it was so desperately needed. Urgently needed.” Pres. Joe Biden said.

The effect of a stimulus bill on Bitcoin is similar to that of cyclical stocks when conditions are back to normal. In other words, when the U.S. Senate passes a stimulus bill, the financial conditions get more stable; consequently, it leads to price increases of the digital currencies. For instance, in April 2020, the 1st stimulus bill was passed leading to a bull run in both U.S. stocks and cryptocurrencies. 

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Peter Brandt, an experienced trader, discussed decreased purchasing power of the U.S. dollar as only the beginning. He argued that a devaluing dollar plus the new stimulus check will drive Bitcoin to go on another rally again.

“The devaluation of the purchasing power of the U.S. Dollar $DX_F has only just begun. This is why Bitcoin $BTC, real estate, U.S. equities and commodities will continue to trend higher when expressed in $USD fiat terms.” Brandt wrote.

Are Chinese companies imitating MicroStrategy? 

Meitu, the first Chinese listed company to buy millions of Bitcoin, is jumping in the game. The software company disclosed in a statement that it had bought exactly $40 million worth of Bitcoin and Ethereum.

In a statement, Meitu said: “The Group has purchased 15,000 units of Ether and 379.1214267 units of Bitcoin (BTC), both cryptocurrencies, in open market transactions at an aggregate consideration of approximately US$22.1 million and US$17.9 million respectively, on March 5, 2021.”

Meitu added that “crypto has enough room for appreciation; it can diversify the risk of holding cash in fund management. Affected by this, there may be more Chinese companies buying Bitcoin to boost their stock prices. However, they run the risk of being banned by the Chinese government.”

Wu Blockchain a popular Chinese journalist commented Sunday on Meitu’s deal saying: “The first Chinese listed company to buy a large amount of Bitcoin appeared. Photo-retouching software company Meitu announced that it would buy Bitcoin and Ethereum for $40 million. The company founder was criticized for issuing multiple ICOs in 2017.” 

If more public companies in Asia start following U.S. financial institutions and invest in Bitcoin, the cryptocurrency exchange market will see an influx in new capital.