Reacting to an upcoming announcement from President-elect Joe Biden on his plans for a COVID-19 stimulus package, the price of Bitcoin and the stock markets rose. With a proposed $1.9 trillion rescue package on the way, this could be all Bitcoin needs to reach new highs.
On Thursday night, Biden gave an outline of his $1.9 trillion spending package. The stimulus package is being channeled into combating the health and economic challenges of the coronavirus pandemic.
According to Biden, $400 billion will go into combating the pandemic directly. Another $350 billion would be allocated to state and local governments to help bridge budget shortfalls. The outline also includes a $1,400 direct payment to individuals, a federally mandated paid leave for workers, robust unemployment benefits, and large subsidies for child care costs.
Prior to Biden’s announcement, markets were also jumping. Bitcoin pushed to the $39,500 range but has now dropped to $38,400 as of press time.
Considering Bitcoin’s recent Bull Run and increased media attention, stimulus packages could add the dry powder to inflate a risk-on asset like Bitcoin. Similar to Trump’s package, a significant amount of Biden’s payments to individuals could find their way into Bitcoin and other digital currencies amid inflation worries.
Several institutional players have decried the printing of trillions of dollars as stimulus packages, given its contribution to inflation. Surprisingly, despite the massive bailout, the U.S.’s jobless claims are on the rise. The Department of Labor has witnessed a 181,000 jump in claims since last week.