Bitcoin has shot up beyond $9,600 for the first time in what feels like an eternity, and analysts believe that $10,000 may not be too far off.
Bitcoin Is Exploding Again
The world’s number one cryptocurrency by market cap has been trading in the low $9,000 range for some time. While it has consistently sold above the $9,000 mark since early May, it hasn’t experienced any large breakouts as of late, which has caused disappointment amongst crypto followers to the point that even Google searches for the term “bitcoin” have fallen dramatically in recent days.
But now, it looks like all that is changing. The Federal Reserve is expected to approve another $1 to $2 million stimulus package to help America deal with the ongoing coronavirus crisis that has been affecting the country for the past four months. A first stimulus package was approved in late March and saw roughly $2.2 trillion pumped back into the economy. Businesses gained access to all kinds of new loan options, while Americans that made less than $75,000 each were given $1,200 stimulus checks.
It looks like a second stimulus wave is on its way, and while it won’t be as large as the first runaround, it’s still a solid boost to an ailing system. For all the people that have decried the previous stimulus efforts, the maneuver has certainly had a positive effect on the country.
Some of the people to speak ill of the stimulus efforts include Tesla and SpaceX CEO Elon Musk, who claimed that the Fed was not capable of simply printing money out of thin air. The concern was that this would potentially lead to inflation and other economic problems, and it looked like many people agreed with him.
For the most part, however, inflation hasn’t been an issue. In fact, bitcoin first began its meteoric rise to its present status when the first stimulus round was approved by Congress. The asset had fallen to as low as $3,800 by mid-March, though by the end of the month, the currency had risen back into the low $6,000 range.
What Will the Second Stimulus Do for the Economy?
From there, as people and businesses began to have their money delivered to them and the economy began to show signs of promise, the bitcoin price spent the next four weeks spiking even further. It ultimately finished the month of April in the high $8,000 range, and by the time May rolled in, the asset shot beyond $9,000 and has never turned back.
So, for all that people like Musk have claimed that stimulus checks do more damage than good, one can argue that the situation has proven beneficial for bitcoin and the crypto space in general. With a new stimulus round expected soon, perhaps BTC is in line for another meteoric surge.