After a few days of uncertainty, the price of Bitcoin managed to reach $51,000 today, after the United States Senate passed the highly-anticipated $1.9 trillion stimulus bill, which, as a side note, is two times larger than the digital asset’s market cap.
According to US President Joe Biden, this approval confirms the major progress in delivering a “desperately needed” stimulus bill to the citizens.
“Today I can say we’ve taken one more giant step forward in delivering on that promise, that help is on the way. It wasn’t always pretty, but it was so desperately needed, urgently needed.”
Why was this stimulus a trigger?
Generally speaking, when such a bill gest passed, it has the ability to immediately relax the financial conditions in the United States. And 2020 managed to show that the effects of measures like this one can raise investors’ appetite for risk-on assets. Cryptocurrencies and stocks included.
For example, back in April 2020, when the first stimulus bill was passed, it triggered a huge bull run, in both the equities market in the United States, as well as the crypto market. As expected, many investors believe that the second stimulus package can have a similar effect on Bitcoin’s price, in the short term.
Traders are looking forward to improved sentiment
Long-time trader Peter Brandt believes that the current devaluation of the purchasing power of the United States dollar has just begun, adding that the combination of a devaluing dollar and the latest stimulus package can help the market sentiment around BTC, as well as many other cryptocurrencies, to improve.
“The devaluation of the purchasing power of the U.S. Dollar has only just begun. This is why Bitcoin, real estate, U.S. equities, and commodities will continue to trend higher when expressed in UD fiat terms,” he noted.
Finally, if the stock market in the U.S. will eventually begin recovering, following what can be considered a week-long pullback, we won’t be surprised to have an even bigger, positive impact on Bitcoin’s price, considering that the crypto market, as well as equities, fell during the most recent correction.