Bitcoin, the world’s largest and most popular cryptocurrency by market cap, has once again surged into the high $50,000 range. At the time of writing, one unit of BTC is trading for well above $59,000, suggesting that another attempt at $60,000 could be just around the corner.
Bitcoin Has Surged Back Into the High $50,000s
The asset reached its all-time high of more than $61,000 just a few weeks into the month of March, though this newfound stamina ultimately didn’t last long. As we’ve seen in the past, when bitcoin spikes to such an unprecedented point within a short period, a correction is usually imminent, and this time around was no different. Within just a few days, the currency was the victim of a massive selloff that saw the asset lose more than $5,000 within 24 hours.
However, Americans are now being given a third round of stimulus checks meant to offset some of the financial burdens caused by the ongoing coronavirus pandemic. Many people are planning to use this money to invest in cryptocurrency and bitcoin according to a recent survey, and it’s likely this may already be happening.
Otherwise, the idea of Americans becoming more financially secure and putting their funds back into the country they call home is also likely causing bitcoin to spike. These kinds of stimulus measures will often lead to a certain level of chaos in the standard financial space. Continually printing money causes inflation, and this inflation drives assets like USD into the ground.
When fiat is down for the count, bitcoin can rise from the ashes and experience a solid boost that makes it appear even stronger as a hedge tool.
This has been going on since early last year, and this trend appears to be continuing. Granted stimulus measures keep going, USD is likely going to continue to suffer from inflation and a weakening economy, and thus bitcoin can engage in further price spikes. This is the attitude amongst most analysts including Edward Moya, a senior market figure with Oanda.
In a recent interview, he states:
An accommodative Fed until the job is done should keep the world’s largest cryptocurrency strongly supported.
In addition to putting money back into people’s pockets, it appears the Fed has pledged not to raise interest rates until the year 2024, giving people three years of no surprises.
Giving the Money Back
Similar sentiment is coming from figures such as Justin d’Anethan, head of exchange sales at Diginex. He recently commented on the effectiveness of stimulus measures keeping bitcoin strong and stable during a time of economic crisis, while large institutions continue to invest and pave the way for crypto activity:
It seems that people are buying globally, nudged by Meitu, a Hong Kong listed company, buying yet another $50 million worth of crypto and overnight, the news that Morgan Stanley will enable its wealthier clients to access BTC funds.