Bitcoin Surges Following News of Further Stimulus ChatOctober 11, 2020
At the time of writing, the price of bitcoin has shot up by more than $300. It’s often been reported that September is a naturally bearish month for bitcoin and several other assets, but that it will usually fail to have any lasting effect on the price of the currency. It will not carry anything into the fourth quarter, and thus far, things are playing out as normal.
Bitcoin Is Up Even More Today
There is more good news in that it looks like bitcoin is becoming far more mature and much more stable. For example, during September of last year, the currency fell by more than $1,000, dropping from roughly $9,400 down to about $8,100. Many wanted to blame the dismal introduction of Bakkt – the institutional crypto trading platform that had been touted since late 2018 – for the currency’s lowly performance, but one can argue that it was simply a case of the “September bitcoin blues.”
However, while things ultimately improved, it took much longer to do so. Bitcoin ultimately didn’t begin showing life until two months later when November arrived. The currency finally hit the $9,000 mark again in early November after several weeks of dismal drops, but things didn’t even last then. The currency finished the year at a measly $7,000.
While we haven’t reached November or December yet, it’s certainly promising to see bitcoin back to its normal, bullish roots so quickly following only 30 days – rather than last year’s 60 – of negative behavior.
Many analysts were quick to notice the change, and while some are “blaming” Square’s recent purchase of roughly $50 million in BTC units for the currency’s sudden surge, others believe that the renewed stimulus talks have something to do with the change in bitcoin’s overall demeanor.
This second round of stimulus checks has led to excessive talk, with Speaker of the House Nancy Pelosi and Treasury Secretary Steven Mnuchin duking it out over every little thing. Democrats are once again trying to pack the spending bill with millions of additional dollars that go towards their own interests.
President Trump is not waiting around for Congress to get its head in the game. He’s now proposing a large $1.8 trillion bill designed to stimulate the economy and put money back into working families’ pockets, and investors are smelling green at every corner. Russ Mould – an investment director at brokerage AJ Bell – commented:
Investors continue to be focused on the potential for more stimulus measures.
Can’t Congress Get It Together?
Mati Greenspan of Quantum Economics explained that the recent stimulus talks have caused stocks to surge, and in sharing a correlation with bitcoin, led to a spike in crypto prices. He says:
On super long-term charts, bitcoin has always been somewhat related to the stock markets, behaving as one might expect of a high-risk asset, especially reacting loosely to the addition or removal of stimulus from central banks.
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