New stimulus package in the US. What does this mean for Bitcoin and other cryptocurrencies?

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Strictly speaking, this factor can affect the rate of bitcoin and other cryptocurrencies very much. In order to understand exactly how, it is necessary to understand the reasons for the growth of bitcoin in the last 6-12 months. Back in March last year, bitcoin could be bought at a price of $4,000 per coin. It is believed that the growth factor of bitcoin coincided with the beginning of the pandemic and the global crisis for a reason. First, in absolutely unstable times, investors needed an additional investment tool that could hypothetically cover losses from other instruments that showed negative dynamics during the crisis. Secondly, the price of bitcoin a year ago was very attractive. Third, the U.S. government, as well as other governments and central banks, began to pour hundreds of billions of dollars into the economy. The money supply grew, and the surplus money had to be put somewhere. Why not in Bitcoin? Fourth, bitcoin has been actively used in recent months as a means of protection against inflation. Although, initially, the surplus money began to go into the cryptocurrency segment, and after Bitcoin, as usual, they began to buy everything, because it is growing. Accordingly, if another $2-3 trillion is poured into the US economy in 2021, this could potentially mean that the demand for bitcoin will grow even stronger. Of course, we can hardly expect that any ordinary American family with an annual income of less than $100,000 will run to buy bitcoins when they will have to pay $1,400 per person for assistance from the US government. But nevertheless, a certain part of the population can take such a step. After all, bitcoin is bought not only by professional traders and investors. However, there is another factor that can greatly affect the bitcoin quotes and it is more important than the factor of the new incentive package. If a large part of the market considers that bitcoin is no longer able to grow further, it will begin to get rid of it. And this process cannot be stopped or predicted. Moreover, the crisis is ending, economies are recovering, and the vaccination process is in full swing. Therefore, investors may begin to slowly abandon bitcoin in favor of other more stable and less volatile instruments. Thus, everything will depend on the "hamsters" in the coming months. Large and institutional investors should just keep their bullish attitude and not get rid of bitcoin. In this case, the cryptocurrency may become even more expensive in the next 2-3 months.

The material has been provided by InstaForex Company - www.instaforex.com

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