Crypto traders are watching the latest push of U.S. President Joe Biden and his administration to pass a nearly $2 trillion COVID-induced stimulus package.
Biden and his administration are set to go full-throttle on the stimulus package, as the U.S. President is considering several public meetings to showcase his aid proposal. The move would put enormous stress on Congress, as Republicans are concerned such a massive aid would only add to the public debt of the United States. However, the growing support for stimulus payments may swing some Republicans into supporting Biden’s proposal.
The world of cryptocurrencies reacted swiftly to the news, with Bitcoin bulls pushing the price of the number one cryptocurrency very close to $50,000. After a bearish push and a massive profit-taking from day traders, Bitcoin bounced back from its $47,201.30 low to hit an all-time high of $49,708.58. On some exchanges, the BTC ATH price went even higher - the Bitstamp exchange was trading Bitcoin against $49,938.00 USD.
Source: TradingView
Currently, the leader in cryptocurrencies is trading at $49,140.48.
Financial analysts, however, are considering the recent Bitcoin price moves as a “rational bubble”. Chief economic adviser at Allianz Mohamed A El Erian added that the ongoing wave of institutional investments in the crypto sector is driving the bubble higher, possibly inflating the Bitcoin price even further.
“In addition to massive central bank liquidity injection, there are now massive fiscal injection prospects on the top. So basically, the investors feel confident in riding what appears to be a massive liquidity wave,” El Erian commented.
Meanwhile, crypto analysts consolidated on the opinion that Bitcoin would surpass the $50,000 mark, despite failing several times. For example, CryptoQuant’s CEO Ki-Young Ju noted that there is a spike in stablecoin reserves in all of the exchanges, which is a sure sign of entering the Bitcoin race. Dollar-pegged stablecoins like Tether are used as a gateway to buying cryptocurrencies like Bitcoin.
“This $50k battle is about Coinbase whales(USD) vs. Stablecoin whales(USDT),” the analyst added. “Negative Coinbase premium, but plentiful stablecoins in exchanges. Negative Premium should be cooled down to get another leg up.”