Political events in the USA are considered to be an important influencing factor for the crypto market. While stricter rules for stablecoins are getting closer and closer, the Bitcoin rate started to recover on December 21st. Is there a connection here to the chaos surrounding President Biden’s stimulus package?
Bitcoin shows recovery signals. Because after a downtrend of several weeks, the crypto key currency squinted in a bullish direction for the first time in a long time on Tuesday. At press time, BTC was trading at around $ 48,700, heading for the psychologically important $ 50,000 mark. Meanwhile, the eyes of the world are on Washington. There a senator opposed Joe Biden’s massive climate and social package.
In addition to the controversial – and already passed – infrastructure program in Bitcoin circles, the 1.75 trillion US dollar legislative package is considered a prestige project of the US president. Relief for families paired with investments in the health system and renewable energies should have regenerated the US economy and counteracted the climate crisis. With the vote in the House of Representatives, the first hurdle was already overcome in November. It must be particularly painful that Joe Manchin, of all people, wants to outsmart the Democrat Biden. The West Virginia senator gave on December 19th surprisingly knownthat he doesn’t want to vote for the infrastructure package after all. Without Manchin it would be difficult for Biden to get the law past the Republican opposition through the Senate.
As a result, Manchin received mainly applause from the Republicans. The White House, however, accused the senator of breaking his word. Manchin and the Biden administration had been looking for an acceptable compromise for months. Biden even agreed to halve the project from 3.5 to 1.75 quadrillion US dollars. It remains to be seen whether a further slimmed-down version of the package can still secure a majority. For the US president, however, this is a bad start to an election year in which half of the seats in the US Congress will be reassigned.
Does Bitcoin benefit from the uncertain market situation?
The political turmoil in Washington did not leave the US economy unaffected. Goldman Sachs corrected on the same day its forecast for the US gross domestic product down. The markets also reacted promptly, with the trend-setting S&P 500 index showing a clear kink on Monday. Victoria Fernandez, an analyst at Crossmark Global Investments, assessed the situation on the US stock market Bloomberg as follows:
The uncertainty is greater than most people who expected a Santa Claus rally would have expected. Volatility and uncertainty are the key words that will lead us into the new year.
Fernandez Statement is not without a certain irony from a crypto perspective. After all, “volatility” and “uncertainty” are two key terms in the anti-crypto narrative: inside. But if the conflict between Biden and Manchin is causing the traditional markets to tremble, a line can be drawn to Bitcoin’s five percent gain on the following day.
The events in the USA must nevertheless be understood as a partial factor in the market. Because in addition to the uncertainties surrounding Biden’s economic stimulus package, the rampant Omikron variant is causing fears of inflation to rise worldwide. The next few months therefore hold the potential to re-support the well-known thesis of Bitcoin as a store of value in times of crisis.