We attributed the cause of the last Bitcoin rally to Tesla. So is this approach correct? On the other hand, are there other elements behind the rally?
US Leader Joe Biden’s administration plans to issue a third incentive at the cost of $1,400 per US citizen. Therefore, everyone is now looking forward to the enactment of the corona virus aid plan.
If the proposed plan is implemented, $1.9 trillion will be on the market beyond the previous incentive schemes currently in use. This aid is in line with the need to revive the economy. But some reports state that this breakthrough helped the Bitcoin rally.
Are Central Banks’ Financial Expansion Policies Helping BTC?
According to the Financial Times, a number of central bank incentives are currently supporting Bitcoin’s rally and fueling its growth.
In fact, Michael Bollinger, Chief Financial Officer of UBS Asset Management, takes into account the history of bubbles. In this context, there is a belief that the current “BTC bubble” will continue to inflate for longer than expected before turning to a random collapse.
According to Bollinger’s perspective, Bitcoin is currently powered by Central Banks. However, the interesting and different thing here is that the digital asset continues to be called a “bubble” by some. For the cryptocurrency, terminologies such as “speculative” rather than defining its true value are systematically on the agenda.
This Approach Is Different
Now, there is definitely a logic behind the effect of quantitative easing on Bitcoin. But this situation will be on the agenda in a different way.
A recent Ecoinometrics report observed that there is more liquidity in the current financial system. This is correct. However, this does not mean that such a situation only benefits Bitcoin. Other investment opportunities are also the subject of speech. But they are slipping under the radar. The popularity surrounding Bitcoin is contagious to its adherents and troubling to its skeptics.
Purchasing Power Decreases But Bitcoin Price Rises
The bottom line of the current market is that the Fed Reserve is always printing money. This, in turn, led to a decrease in the purchasing power of prestige money. For this reason, many people are now looking at investment windows.
Bitcoin has recorded strong returns since last year. This is why more and more people are entering the BTC space.
Additionally, Bitcoin is currently investigating the effects of S-curve adoption. It’s probably eyeing exponential growth in the future.
Prior to its 2017 bullish cycle, multiple supporters of Bitcoin were tech developers, anarchists, and libertarians. Now, the asset class is becoming more diverse with rising institutional interest in the market. Therefore, the Bitcoin bubble will no longer grow. In fact, it’s a neat possibility that the bubble no longer exists.