Bitcoin, reflecting traditional markets, has managed to pull out of a downward spiral last week following news that President Trump seeks to pass a hefty stimulus package. There is a finite supply of Bitcoin versus a hypothetically infinite quantity of physical dollars. This combination of fiat debasement and monetary stimulus is ideal for Bitcoin to thrive and has investors expecting serious growth.
As previously reported, gains in the market were seen when stimulus talks were last positive. The current Payroll Support Program ends this month, adding urgency to talks around a new package of measures. Increasing optimism around stimulus talks reported by both the President and Mark Meadows, Chief of Staff, suggests a compromise may be reached in good time. Talking to CNBC, Meadows admitted discussions were positive.
“[I am] probably more optimistic about the potential for a deal in the last 72 hours than I have been in the last 72 days”
Mark Meadows, CNBC
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Only two weeks ago, Bitcoin fell $200 after Trump tweeted that Pelosi’s proposal was outrageous, and no stimulus deal talks would occur until after the Presidential election.
However, there are now indications that Trump is pushing for a greater stimulus deal than the House Speaker, Nancy Pelosi, has proposed. As Bloomberg highlighted earlier in the week, Steve Mnuchin, Treasury Secretary, reported President Trump would personally lobby for his stimulus package to persuade reluctant Republicans in the Senate. Jay Powell, Federal Reserve Chair, was hopeful:
“There does seem to be an appetite on the part of all the relevant players to doing something, the question is how much and when”.
Jay Powell, Chair of Federal Reserve
A $1.8tr deal is already on the table from the administration. Exceeding Pelosi’s $2.2tr virus response proposal would be a serious political challenge for the President, but an increase in the current package could heighten Bitcoin gains.
