President Trump has always been a ‘go big or go home’ type of guy, and now one might say he’s putting his money where his mouth is. The U.S. government has set its sights on lining your pockets with cash as part of a whopping $850 billion stimulus deal in its latest attempt to combat coronavirus. [The Wall Street Journal]
While it’s not Bitcoin, the “free money” still has the potential to bolster the cryptocurrency market, depending on how people choose to direct the funds. Given the rapidly deteriorating economy, the government wants to get checks into the hands of Americans “immediately,” according to Treasury Secretary Steven Mnuchin.
Some checks would reportedly be for $1,000. [Reuters] The gesture was not lost on Andrew Yang, the former Democratic presidential candidate who pushed for Universal Basic Income (UBI).
The funds are designed to be a lifeline to consumers who are struggling from the economic standstill that has come at the hand of the coronavirus epidemic. The bold stimulus package, which was announced today by the Coronavirus Task Force, also gives individuals and businesses the ability to defer tax payments of up to $1 million and $10 million, respectively, to Uncle Sam. [CNBC]
While the bold stimulus package would be a shot in the arm to the U.S. economy, a rising tide could also lift all boats. People who have become disenchanted with the fiat monetary system over these last few days could find refuge in digital currencies like Bitcoin, which has a finite supply, is readying a halving event in the coming months and is not vulnerable to the whims of any central bank.
Meanwhile, as the Fed continues to print money, the cryptocurrency community continues to watch from the sidelines. In what might be described as an “I told you so moment,” market leaders can’t help but point out that the writing has been on the wall.
Another Economic Band-Aid
Since coronavirus took the world by storm, it has wreaked havoc on the financial markets and economy alike. The government has responded with the biggest Band-Aid it could muster, including slashing interest rates to zero and pledging an $8.3 billion spending bill to combat the pandemic.
Until now, it did little to sooth investors’ fears, as the stock market continued on its plight. Meanwhile, not only did the bottom fall out in the traditional markets but the pessimism spilled over into store-of-value assets including Bitcoin and gold.
The latest stimulus plan, however, has had a positive effect on the markets, including both stocks and cryptocurrencies, which are now trading higher. Gold is similarly trading in the green, with the price hovering at $1,529 at last check after dropping to multi-month lows beneath the $1,500 level on Monday. [CNBC]
To be clear, Treasury Secretary Steven Mnuchin, who announced the checks that are likely coming to the mailboxes of Americans in the next two weeks, is no Bitcoin fan. Neither is President Trump. Both of them, who have made their fortunes with fiat, would shudder at the thought of Americans directing their stimulus check toward cryptocurrencies such as Bitcoin. Nonetheless, it has seemingly been retail investors who have been doing the buying during this latest market cycle, and it’s not too much of a stretch to imagine that they won’t stop now.