The Bitcoin rally continued during Thursday’s European session as traders ignored Washington’s political turmoil to focus instead on the potential for higher government spending.
The BTC / USD exchange rate set a new high of $ 38,180, adding 10 percent to what has been a relentless upward trend over the past four quarters. While the pair later cut some of those gains, general enthusiasm about the risk-on markets suggested that it would continue to rise in the upcoming US session.
Bitcoin closes above $38,000 in the latest intraday rally. Source: BTCUSD on TradingView.com
Investors’ optimistic outlook on Bitcoin improved further thereafter Democrat Jon Ossoff’s victory during the second of two second Senate elections in Georgia. The seats transferred control of the United States Senate to the administration of President-elect Joe Biden. That raised hopes of additional stimulus for the US economy, starting with $ 2,000 in direct aid to deserving Americans.
A joint session of Congress on Thursday morning also confirmed a clear victory for Mr Biden. Meanwhile, outgoing President Donald Trump agreed to an “orderly transfer of power” after denying it since Biden’s lead in the US presidential race.
“We are now expected to avoid a deadlock and that more fiscal support will be available to the economy next year than less,” said Christopher Smart, chief global strategist at Barings. told the Wall Street Journal.
Bitcoin to the moon
So, it appears that Bitcoin traders were optimistic about the overall political update.
The cryptocurrency overshot nearly 900 percent after its March 2020 low at less than $ 4,000. Profits surfaced especially after the Federal Reserve announced an open-ended sovereign and corporate debt purchase program and decided to cut benchmark interest rates to close to zero.
Meanwhile, the US government approved a $ 2.3 trillion stimulus package for US households and businesses suffering from the economic aftermath of the coronavirus pandemic. In December 2020, the White House approved an additional $ 900 billion in aid against the Democrats’ demand for “at least $ 2 trillion.”
“When it comes to the hands of the young, they go straight to their hands accounts, ” said Mike Novogratz, CEO of Galaxy Investment Partners, On stimulus stimulate market profits. “One of the most unique things last time was seeing how many people bought Bitcoin with the exact amount of stimulus. Tree. Tree.”
Institutional investors are also gaining exposure to the Bitcoin market, believing that the strategy would protect their portfolio should their cash reserves lose value. Hedge fund veterans, including Paul Tudor Jones and Stan Druckenmiller, bought a small portion of Bitcoin in 2020.
Meanwhile, companies like MassMutual, MicroStrategy, Square, Ruffer Investments also bought Bitcoin against their fears of inflation.