In the second half of 2020, Bitcoin performed outstanding thanks to Federal Reserve’s money input into supply. Biden’s team proposes a $1.9 trillion stimulus plan as relief cash amid the second wave of Coronavirus pandemic.
Fear of Inflation and Devaluation
Jerome Powell, Federal Reserve Chair, inducted cash of $3 trillion in 2020, which caused Bitcoin’s price to soar. The Fed is going to print $1.9 trillion more and will keep interest rates low. Financial experts expect the US dollar devaluation and inflation as well. Some even believe the only top digital asset will rescue investors from losing their money in such conditions.
Steven Schnall, the CEO of US-based digital banking institution Quontic, explained that the infusion of trillions of dollars could threaten economic activity and the US dollar in terms of inflation and devaluation. He claimed Bitcoin could perform as hedge instruments against such unusual events in the traditional financial world.
Tyler Winklevoss, the co-founder and CEO of crypto exchange Gemini, considered Biden’s relief package a “multi-trillion dollar advertisement for Bitcoin.”
Grayscale is now the world’s biggest digital asset management company that holds nearly $23.69 billion in assets under management. It has witnessed an exponential surge in Bitcoin Trust over the recent few months thanks to institutional investors who have taken a keen interest in the top-ranked digital currency. As reported today by Bloqport, Grayscale has purchased 2,612 Bitcoin worth approximately $98 million. The Ethereum Trust, on the other hand, has experienced a decline over the past few days.
Some market observers think Grayscale is the reason behind the price rally in the last 48 hours. Institutional investors, however, can cause the quick rally of Bitcoin if they want.
Due to high purchasing, the BTC supply is decreasing on cryptocurrency exchanges. For instance, famous crypto exchange eToro has revealed its plan of limiting crypto services over weekends. The scarcity of the leading cryptocurrency could also pump the price value upward.
Anthony Pompliano, the co-founder of Morgan Creek Digital, said the current bull run happens due to fundamentals. There is no place for FOMO in recent bullish rally compared to those beliefs that support FOMO theories.
The price value may see new high levels in the coming days as sentiments are extremely bullish among healthy investors. Prominent crypto YouTuber and analyst Lark Davis speculated that Bitcoin could reach $100k by the end of 2021.