The price of Bitcoin crossed $50,000 on March 7, following the news that the U.S. Senate has passed President Joe Biden’s $1.9 trillion COVID-19 stimulus package. At the press, the cryptocurrency is trading at $50,759.63 at a regular gain of 2.56%. This is the highest over the weekend, according to the data from CoinMarketCap. Moreover, the approval of stimulus packages has a track record of firing Bitcoin’s price surge.
The underlying economics is uncomplicated, as stimulus includes minting many fiat currencies, which increases the amount of money in circulation. Inflation appears with this improved circulation, decreasing the purchasing power and the fiat currency’s overall value, in this case, the U.S. Dollar. Both citizens and businesses will be susceptible to the dollar devaluation over time. Therefore, they need to explore options to protect their holdings further. This is where Gold and Bitcoin arrive into action.
Bitcoin witnesses increased adoption in the past year
Although the claims are debatable, the Bitcoin has accomplished increased adoption over the past year as the better store of value and hedge against inflation. Some citizens may also employ the stimulus package to buy Bitcoin, and analysts may witness an enhanced inflow of funds into the digital assets as the stimulus cheques get addressed. Firms such as MicroStrategy, which has a history of strategically investing shareholder’s funds into Bitcoin, may also discover new ideas to enhance their overall stakes. An inflow of funds into Bitcoin is bound to raise its price over time exponentially.
The digital currency is already reacting to this possibility with the growth it has picked up today. A target of $58,000, its previous all-time high, is being proposed in the coming weeks, and later, the cryptocurrency will be on the path to tap new price levels by the end of the first quarter, 2021. The other crypto coins also lined-up following BTC to start correction and attain their way up. Ethereum, the altcoin with the largest market cap, increased by 7%. Nevertheless, at $1,667, it’s still 17% shy of its ATH of over $2,000 only weeks back. Furthermore, XRP, BCH, EOS, DOGE, among others, have also been going back up.
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