With the printing press going into overdrive and another stimulus plan about to beget more magic government money, the environment for buying Bitcoin is falling into perfection.
And the macro economy led Bitcoin billionaire and Gemini Exchnage CEO Tyler Winklevoss to claim the Fed was setting the stage for Bitcoin’s next bull run.
The Perfect Environment For Bitcoin
Since the US government’s announcement that they were about to approve a second round of stimulus cheques for American citizens, Bitcoin has been on a steady rise, and a sudden burst through the $11k barrier earlier today.
While the stimulus finally found its way to the people, the announcement that even more money will be created out of thin air is fuel for Bitcoin’s highly flammable fire.
Added with the PPP, the Trillions already printed will inevitably lead to inflation and other economic problems further down the line.
Coincidently, during the last stimulus cheques of $1200 being distributed, crypto exchanges noticed that many of its users were purchasing Bitcoin and other cryptocurrencies for $1200 or close to that amount.
Bitcoin – A Hedge Against Government Printing Press
Bitcoin is seen as a hedge against the government printing press, and the worries all the newly created dollars will have on their dollar purchasing power.
So, with more magic government money coming the way of Americans, it’s likely more stimulus cheques will be spent on proper, hard money.
Tyler Winklevoss believes so. In a recent tweet, the former Olympian said, ‘When money printers go brrr and inflate the stock markets, it’s time to go bitcoin.’
‘Bitcoin doesn’t grow on trees,’ he said.
The Fed Is Pumping The Stock Markets
And who can argue? With the Fed continuously stimulating the economy one way or the other, the US stock markets enjoyed their longest bull run in history until the crash in March.
And with over 50 million Americans losing their jobs since March, the fact that the stock market has rebounded so emphatically is hardly a surprise when you realise where most of the new trillions are going.
And while the stocks surge, they’re only really surging because the value of the thing they’re priced against is falling against them.
When money is created out of thin air it’s only going to end badly for any national economy.
Anybody educated in fiscal and monetary policy knows this, and very little is kept in fiat currencies. And more investors are realizing, like gold and real estate, Bitcoin is now a viable option for storing wealth.
No doubt Bitcoin has volatile swings to the upside and downside, but its macro trend is undeniable.
More institutional investors are making their way to Bitcoin. Grayscale Investment has been buying more Bitcoin than is being created since the Bitcoin halvening. Hedge fund veteran Paul Tudor Jones said it was time to back the fastest horse: Bitcoin.
Not forgetting Yale and Fidelity openly announcing their exposure to the Bitcoin space, and the fact that banks are now legally allowed to custody Bitcoin for its clients, only validates Tyler Winklevoss’ claim.
It’s Bitcoin Bull Season
There’s undoubtedly a lot of excitement in the Bitcoin space. We had this last year with the run up to $14k, but it feels different this time.
Last year was unexpected, and as we have learned since was driven by the PlusToken scam, but now pretty much everyone in the space is in agreement.
The halvening has now passed, there aren’t enough new bitcoins made to go around, most people in the space are bullish and it’s starting to feel like late 2016 again when we were trying to retake $1k again.
Institutions and big investors are here, the ones prepared to ride the volatility anyway, and with the government creating an environment that Bitcoin was designed for, the next bull run might just melt your face off.