Fuel for the Bitcoin Bull Run: Now comes the trillion dollar financial injection
Bitcoin has stagnated in recent days, after peaking at $19,950 in early December. Then came the crash. Currently BTC is traded for $17,700.
Some have already anticipated the current correction due to technical and on-chain trends: addresses associated with whales had started to increase their deposits on stock exchanges, certain mining pools had started to sell by the Bitcoin Profit App their stocks.
But Bitcoin’s fundamentals appear to be stronger than ever as the world’s governments and central banks continue to print money to save the weakening economy.
Bitcoin’s bull case still strong amid unprecedented monetary stimuli
Cameron Winklevoss, co-founder of Gemini, recently pointed out that the Bitcoin bull case is confirmed, while the European Central Bank is pressing for further stimulus.
With the pandemic once again worsening and the introduction of the vaccine slower than hoped for, the world’s central banks are taking evasive measures to prevent the pandemic from affecting the economy even further.
As Winklevoss comments, the ECB alone is currently pursuing an increase in its „bond purchase programme by the equivalent of $2.2 trillion“. 2.2 trillion dollars is about 10 percent of the European Union’s total GDP last year.
This is in addition to the more than $1 trillion of stimulus measures it already implemented at the beginning of the year.
And the move is by no means limited to the European Union. Australia, whose economy is known to have been strong in many recessions thanks to international investment, has also introduced negative interest rates to save its economy.
In the US, there are reports of an imminent fiscal stimulus package worth some $1 trillion, which could include further widespread distribution of cheques to a large proportion of American families.
Many see these steps as a confirmation of the Bitcoin bulls, as they show the volatility of Fiat money compared to hard money – like BTC.
Wall Street takes notice
This push for further monetary incentives worth trillions of dollars has made Wall Street sit up and take notice. Before this year, there were very few well-known investors and major banks involved in this area.
Now Wall Street investor Paul Tudor Jones declared earlier this year that Bitcoin will be the fastest horse in the race – commenting on Bitcoin’s potential to outperform in times of massive stimulus.
And investor legend Stan Druckenmiller believes If the „gold bet works“ (alluding to inflation), Bitcoin will „work even better.
A growing number of Wall Street investors are convinced that BTC will perform better than gold because there is still a trend towards monetary inflation.