The president’s refusal to budge on a $1.9 trillion COVID-19 relief bill will have knock-on effects for Bitcoin, as the money printers look set for action once more.
United States President Joe Biden has rejected a Republican proposal for a COVID-19 relief bill that would have seen $618 billion allocated to struggling American households and businesses.
Biden and newly appointed Treasury Secretary, Janet Yellen, dismissed the sum — just under the size of Bitcoin’s entire market capitalization — as insufficient for stimulating the economy amid the ongoing pandemic, Reuters reported.
Democrats voted along party lines in the U.S. Senate on Jan. 2 to push through Biden’s relief bill that would see the GOP’s proposed sum more than trebled to $1.9 trillion. Senate leader Chuck Schumer told reporters anything less would leave the country managing the crisis for too long. Referring to the GOP’s initial $618 billion proposal, Schumer said:
“If we did a package that small, we’d be mired in the COVID crisis for years.”
On the same day, the House of Representatives took a partisan vote on the relief bill renegotiation; democrats won 216-210, with no republicans pledging their support.
The Federal Reserve printed more money in 2020 than the nation had issued in its first two centuries of existence; total U.S debt nears $28 trillion at time of writing. That leaves the country with a debt-to-GDP ratio in excess of 130%, the highest in its history by a large margin.
Some posit that the Fed’s money-printing practices ultimately benefit Bitcoin by creating genuine fear, uncertainty and doubt regarding the U.S. dollar. Co-founder and CEO of the Gemini cryptocurrency exchange, Tyler Winklevoss, has previously expressed the view that the Fed essentially primes Bitcoin for a bull run every time it prints more money.
However, even a bull run may not be as bullish as it seems. The number of dollars created in 2020 was equal to almost a fifth of all the dollars ever printed. This inflation effectively robs Bitcoin and other associated cryptocurrencies of its buying power, since they are still valued against the U.S. dollar.
Biden’s relief package proposal represents a sizable reduction from the initial $3 trillion sum he first suggested in early January. Whether such efforts to stimulate the economy will boost the price of Bitcoin is largely a subject of speculation, however, it’s worth noting that the coin’s value has increased by early 700% since the beginning of the COVID-19 pandemic.