New US President Joe Biden will announce a new stimulus package next week to boost the US economy. The package, which commits to $1,400 in individual stimulus grants, will total more than $1.5 trillion.
Due to political disagreements, the current administration failed to secure $2,000 in grants. Now that the Democrats control both the House and the Senate, Biden can push for a higher amount without too much opposition.
Moreover, the president-elect has vowed to take the pandemic more seriously than the current president. The package also includes a lot of money intended to strengthen the vaccine roll-out programme.
The package also sets aside a lot of money for minority communities. A government representative told Reuters, „I think you will see a real emphasis on these disadvantaged communities, where there is a lot of hard work to be done.“
During bitcoin bull market
This fresh, new money comes amid a historic rally in the cryptocurrency market. The market’s total market capitalisation recently rose above $1 trillion, as the bitcoin exchange rate more than doubled its previous record high. The market’s second-largest cryptocurrency, Ethereum, is also on an upward trend and is now also dancing around its highest price ever.
In March, when the first round of stimulus checks was announced, bitcoin just recovered from a dip to $3,000. Some analysts in the community say the bitcoin price recovery is due to wealthier Americans. They do not necessarily need support from the government and therefore bought bitcoin en masse. In that first round, Americans received $1,200. This twitter account keeps track of how much that is worth now, if they had bought bitcoin from that amount.
Going back to now, the current administration has not succeeded in getting every American to receive 2,000 dollars. Instead, $600 is now being sent. These are already on their way to qualified Americans.
Stimulating the markets
The new US administration is trying to find a way to reverse the economic impact of the COVID-19 pandemic. According to various statistics, the United States is one of the hardest hit countries in the world. The economy is sputtering (not seen when you look at the financial markets), there is a lot of unemployment and the new government, of course, wants to get off to a good start.
Several vaccines are on the way, but there are concerns that the roll-out process will take many months. Much of the population will not receive the vaccine until the third quarter. This means that more stimulus checks may be distributed to Americans before the pandemic is over.
And that… is all fuel for bitcoin.