Bitcoin surges above $39K with the latest election results where the Democrats seem to be winning and this helped boost the sentiment so let’s take a closer look at today’s BTC news.
Bitcoin surges above $39K during the European session as Traders ignored the US political unrest and elections, instead focused on the potential for higher sovereign spending. The BTC/USD pair exchange rate established a new record of $38,180 and added 10% more to what was a strong uptrend over the past four quarters. While the pair shed some of the gains, the overall enthusiasm across the risk-on markets suggests that it will continue posting gains in the US session ahead. The bullish outlook on BTC improved even more after the Democrat Jon Ossoff won the second election of the Senate in Georgia. This victory raised the hopes for additional stimulus for the US economy starting with a $2000 worth of direct aid to Americans.
The joint session of Congress affirmed a clear win for Mr. Biden but the current president Donald Trump agreed to an “orderly transition” of power after denying it since Biden led in the presidential race. Christopher Smart, the chief global strategist at Barings said:
“The expectation is now we’ve avoided a gridlock, and more fiscal support will be available to the economy through this coming year, rather than less.”
It seems that BTC traders reacted optimistically to the overall political update and the cryptocurrency surged by 900% after bottoming out in March 2020 below $4000. The gains surfaced after the Federal Reserve announced an open-ended government and corporate debt-buying program by cutting the lending rates to almost zero. In the meantime, the US government approved a $2.3 trillion stimulus package for all American households and businesses that suffered from the pandemic. Back in December, the White House passed another $900 billion worth of aid. Mike Novogratz, CEO of Galaxy Investments said:
“When it comes to the young people’s hands they are going right to their accounts. One of the most unique things last time was seeing how many people bought Bitcoin with the exact amount of stimulus. Boom. Boom.”
The institutional investors are gaining more exposure to the BTC market believing that the strategy will protect the portfolios they own as their cash reserves lose value. Paul Tudor Jones and Stan Druckenmiller already bought a small portion of BTC in 2020. In the meantime, companies like Mass Mutual and Microstrategy also purchased BTC as a hedge of inflation.
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