Bitcoin posted modest gains on Thursday as Democratic leaders signaled they could reach an agreement with Republicans to pass the second round of COVID-19 incentives by the end of the year.
House Speaker Nanci Pelosi (D-Califonia) said On Wednesday, a new bipartisan aid package worth $ 908 billion was to serve as the basis for months of negotiations with the leaders of the White House and the GOP.
“Of course we and others will offer improvements,” Ms. Pelosi said in a joint statement with Senator Chuck Schumer. “But the need to act is immediate and we believe that by negotiating in good faith we can come to an agreement.”
Stmulus pump expected
The BTC / USD exchange rate rose 0.28 percent in the pre-trading session in New York to hit $ 19,278 as traders observed a prolonged uptrend towards their recently identified record high of just under $ 20,000. According to a Reuters report, economic hopes lowered the US dollar, causing Bitcoin to bid higher.
I know a lot of people shared this, but damn it, if that’s not a headline. pic.twitter.com/m4gIhuftub
– Nathaniel Whittemore (@nlw) 1st December 2020
The Federal Reserve and the U.S. government previously committed to infinite quantitative easing, alongside lower interest rates and unprecedented monetary and fiscal incentives to protect the economy from the effects of the COVID-19 pandemic. Her move stressed that short-term debt returns should fall near zero while putting pressure on the US dollar.
As a result, Bitcoin surged more than 400 percent as investors feared inflation would return in the years to come. The cryptocurrency offered itself as an alternative to gold, an established hedge against this trend.
Bitcoin’s rally stalled between August and September 2020 when the Senate, with a Republican majority, refused to accept the House of Democrat’s proposal to come up with a $ 2.4 trillion bill.
Bitcoin holding key support areas above $18,800-level. Source: BTCUSD on TradingView.com
Even so, the cryptocurrency arose on its own after a flood of mainstream companies also supported the anti-inflation narrative. Some of them also highlighted Bitcoin as a credible contender for gold’s dominance in the safe haven market.
Billionaire investors like Paul Tudor Jones and Stan Druckermiller admitted holding Bitcoin. In the meantime, Nasdaq-listed MicroStrategy replaced its cash reserves of $ 425 million with the cryptocurrency. Global payments service Square also has $ 50 million worth of BTC on its balance sheets.
PayPal, BlackRock, Guggenheim, Visa and others also talked about Bitcoin’s long-term potential as a store of payments and value.
Correction won’t hurt Bitcoin Bullish Bias
Mike McGlone, senior commodity strategist at Bloomberg Intelligence, said the cryptocurrency will continue its uptrend as the U.S. budget deficit widened and the Fed remains cautious.
“US $ 10,000 is in 2021 Bitcoin’s Basis for more of it in the direction of 50,000 US dollars, ”the analyst stated on Thursday. “A decrease in risk like the first quarter could bring Bitcoin back towards a $ 10,000 support in 2021, but we believe the path of least resistance will remain higher. The basis for the benchmark was consolidated in 2020. “
BTC / USD was trading at $ 19,345 at the time of this writing.