US stocks are swinging between gains and losses today after the announcement that White House and lawmakers have reached an agreement on a $2 trillion stimulus package to combat the novel coronavirus. Over 400,00 cases have been reported globally with more than 55,000 in the US and over 69,000 confirmed cases in Italy.
After yesterday’s historic surge of 11%, the Dow Jones Industrial Average was up 0.3% Wednesday. The S&P 500 meanwhile slid 0.7% along with Nasdaq Composite that dropped 1.2%.
Bitcoin mirrored the stocks and surged to $6,990, only to come back down to about $6,600 level which economist and trader Alex Kruger said, “is not a coincidence.”
$6 Trillion needed to “bolster the economy”
The legislation that is to be enacted within days involves $350 billion in loans for small businesses and $500 billion to aid airlines and other large corporations. This biggest fiscal stimulus package in American history is double the one passed in 2009 to fight the Great Recession that further involves $1,200 payment for each adult and $500 per child, for households earning up to $75,000 per year or $150,000 for couples.
The emergency package to bail out the US economy amidst the coronavirus pandemic totals at $6 trillion, said Trump administration economist Larry Kudlow.
This package includes a $2 trillion aid from Congress and $4 trillion in lending from the Federal Reserve.
“This package will be the single largest Main Street assistance program in the history of the United States,” said Kudlow adding it was “urgently” necessary to “bolster the economy.”
“No way your dollars can keep their value”
The crypto community took this money printing by the Fed as an opportunity to point out how this won’t help with the pandemic that has taken over 790 lives in the US.
This isn't the first time something like this has happened, Zimbabwe went through money printing madness and ended up printing one hundred trillion dollar note that is worth about $60 USD only for them to abandon their own currency to go for the US Dollar.
Interestingly, Rep. Rashida Tlaib’s recent proposal talked about minting 2 one-trillion dollar coins.
Now, the crypto community is pointing out how the stimulus means, “creation of nearly 50 Bitcoins worth of dollars out of thin air. Not 50 BTC, but 50 Bitcoin networks.”
According to the community, this bazooka means demand for Bitcoin. “There is no way your dollars can keep their value after pumping $6 trillion into the system. It's time to move your fiat into hard money. Bitcoin,” said blockchain consultant Luke Dash.
Bitcoiner Mike Novogratz also pointed out that in the event of “debasement of fiat currencies, monetization of trillions of dollars of debt,” it would be the time for bitcoin.
And if even a portion of this makes it way into Bitcoin, the world’s leading cryptocurrency could easily reach about $100k peak this time.