Bitcoin’s price hit more than $ 51,000 on March 7 after the US Senate passed a stimulus bill of $ 1.9 trillion, almost 2 times the market cap of BTC.
According to US President Joe Biden, Senate approval shows great progress in making a “much needed” stimulus bill for Americans. He say:
“Today, I can say that we’ve taken a huge step forward in delivering that promise, help is already underway. It is very necessary, very urgent ”.
Why is the stimulus package a bullish signal for Bitcoin?
When a stimulus bill was passed, it immediately eased financial conditions in the United States. The past year has shown that these measures increase investor demand for risky assets, including stocks and cryptocurrencies.
In April 2020, when the first stimulus bill was passed, it coincided with a massive bull run across both the US stock market and the cryptocurrency market.
Naturally, investors predict the second stimulus will have a similar effect on Bitcoin price in the short term.
Peter Brandt, a longtime trader, said the purchasing power devaluation of the US dollar is just the beginning.
The falling dollar combined with a new stimulus package is likely to improve market sentiment around Bitcoin. Brandt wrote:
“The devaluation of the purchasing power of US dollars has only just begun. This is why Bitcoin, US real estate, stocks and commodities will continue to tend to be higher when denoted in USD fiat.“
If the US stock market begins to recover from a week-long decline, it could continue to catalyze Bitcoin as stocks and cryptocurrencies fall in parallel during the recent correction.
Chinese companies follow MicroStrategy’s strategy?
Amid the improving macro environment for Bitcoin, China’s first listed company Meitu officially bought Bitcoin and ETH worth $ 40 million. The company stated:
The Group purchased 15,000 units of ETH and 379.1214267 units of BTC in open market transactions with a total value of approximately 22.1 million US dollars and 17.9 million US dollars on March 5, respectively. 2021 ”.
“The first listed company in China to buy a large amount of Bitcoin”, a famous Chinese journalist named Wu Blockchain commented on March 7. “Photo editing software company Meitu has announced it will buy Bitcoin and ETH for $ 40 million. But their founder has been criticized for releasing many ICOs in 2017 ″. He added:
“Meitu says that the cryptocurrency has enough room to increase its price, it can diversify the risk of holding cash in fund management. Affected by this, there may be many Chinese companies buying Bitcoin to boost their share prices, but they may also be banned by the Chinese government.“
If a new trend emerges in which public companies in Asia start to buy Bitcoin, it could lead to a new influx of capital into the Bitcoin exchange market.
While it is unlikely that many publicly listed companies in China will announce buying Bitcoin due to uncertain regulatory environments, countries like Japan and South Korea may see similar trends occur in Next few months.