$1.9 trillion US stimulus pushes BTC price above $60,000
Bitcoin’s price crossed $61,000 on 13 March as the digital currency created a new all-time-high, doubling in its value since the start of 2021. Burgeoning institutional investor’s interest in the crypto space, apprehensions regarding inflation and the US Fed stimulus could be the reason behind Bitcoin’s growth. A new stimulus bill worth $1.9 trillion passed by President Joe Biden boosted the Bitcoin rally as fresh inflows of money into the accounts of people could mean more people investing in crypto.
After a price drop to below $54000 on March 16, the largest cryptocurrency by market cap has increased by 9% to $58,715 as of March 19, 4:30 PM IST. The price can be said to have impacts of announcements made by Fed Chair Jerome Powell adopting a loose monetary policy and quantitative easing methods to provide economic stimulus for the foreseeable future and as a result, the 10-year U.S Treasury bond yields reached 1.75%.
As the dollar loses value, Bitcoin becomes a more valuable form of investment
The higher treasury bond yields are an indication of higher expected returns from investments as the risk of inflation increases. As per a report by Deutsche Bank, Bitcoin could act as a hedge against the declining dollar’s purchasing power especially as BTC’s market cap crossed $1 trillion.
According to an SEC filing, JPMorgan is creating an investment product for its clients providing indirect exposure to companies involved with cryptocurrencies. The exposure basket, its incoming debt instrument, will comprise MicroStrategy (20 %) Square (18 %), Riot Blockchain (15 %) and chipmaker NVIDIA (15 %) with positions in 11 companies. Goldman Sachs also reopened its cryptocurrency trading desk in March while BNY Mellon (BK) is creating its digital asset unit offering integrated services to its client.
Retail investors are showing increasing interest in BTC
As per the data by Glassnode, the number of unique addresses holding BTC above 1,000 has decreased by 8% since 8 February. According to blockchain data, this year’s Bitcoin price rally has compelled investors to sell their holdings and book profits. On February 8, the number of unique addresses holding over 1000 BTCs were at a record high of 2,488 while the number on Wednesday was 2,275, down by over 200 addresses. BTC’s new ATH can be attributed to burgeoning interest from retail investors as large investors remain weak buyers in the process of booking profits.
Ethereum is currently trading at $1,817, down by 6% since its weekly high at $1,935 on March 14th. However, bullish sentiments are supporting the cryptocurrency price as the number of addresses holding ETH above 10,000 has remained unchanged since the asset reached an ATH of $2,050 on February 20. One of the reasons for the ETH price hovering around $1800 is due to large entities such as exchanges, institutional finds and large companies keeping the asset locked-up for investment purposes. Also, there has been an increased level of holdings in mid-tier level addresses as more ETH is being deposited into DeFi protocols, hitting an all-time high. As per the number reported from Debank, a DeFi wallet provider, around 9.6 million ETH is locked in DeFi projects. Additionally, around 3.5 million ETH is staked on the Beacon Chain as per the Eth2 blockchain explorer.
Binance Coin (BNB) is currently trading at $267, down by 2% since last week. Cardano (ADA) is currently up at $1.27, an increase of 24% in price since its last week. Litecoin (LTC) is currently trading at $204, down by 2.4% since last week. Chainlink (+8.4%), BCH (+1%), EOS (+11%), XRP (6.7%), Tron (10%), BAT (57%), and XLM (2.56%) have shown an upward trend since last week.