The $2 trillion economic stimulus package recently passed by Congress to bail out struggling Americans may cause marginal improvement in the value of Bitcoin. This is according to various investors and analysts among them, Wayne Chen, the CEO of Interlapse and founder of digital currency platform Coincurve.
Data Shows increased online Crypto Searches Recently
Data showing recent online searches show that though we are in deep into a global pandemic, crypto searches have spiked. This could be attributed to the newly found disposable time and the sentiment by some popular investors that this is the time to buy. The increased online searches do not mean that people will take their $1,200 checks and throw them at exchanges for Bitcoin. Mass purchase of crypto with the stimulus money will be highly unlikely because the money was set aside to help those that have suffered the shocks of the Covid-19 pandemic. Even people that have not suffered job losses or seen their incomes drop drastically; will probably keep their checks to see how long this crisis stretches out.
Chen argues that investing in Bitcoin and even in traditional stock is probably at the back of most people’s minds right now. Chen does not see the checks triggering massive buy order for now.
“I think people will generally still be holding crypto even after the stimulus package. I don’t think an extra [thousand dollars] of extra pay into their bank account is going to trigger a huge buy activity in the whole cryptocurrency market.”
Why Few Buy Orders are being Triggered
As things stand, there are bigger things to worry about in the United States and most of the world. The shortage of ventilators and coming up with better disease control measures are top of all priority lists. Though the stimulus money will provide relief to lots of struggling families, the money is likely to be kept and spent, which might lead to a recession. The situation will hit both the crypto and stock markets. While Chen stays upbeat about the economic health of the country, he only sees marginal gains coming for Bitcoin. Chen’s views are way more conservative, compared to some analysts that are expecting rocket highs soon.
“It will be very modest. It’s going to be very gradual. It’s not a lot of money that people are getting. People are going to be saving for the longer term. I don’t think it’s going to send Bitcoin to an all-time high.”