US President Joe Biden rejected a Republican proposal for a COVID-19 emergency bill that would allocate $ 618 billion to disadvantaged US households and businesses.
Reuters reported that Biden and newly appointed Treasury Secretary Janet Yellen rejected the amount – just under Bitcoin’s full market value – as insufficient to stimulate the economy in the midst of the ongoing pandemic.
On January 2, in the US Senate, Democrats voted in favor of the party’s position to push through a Biden bailout bill that more than tripled the amount proposed by the GOP to $ 1.9 trillion. “Less will allow the country to manage the crisis for a long time,” Senate Leader Chuck Schumer told reporters. Pointing to the initial Republican proposal of $ 618 billion, Schumer said:
“If we offered a small package of services, we would be thrown into the COVID crisis for years to come.”
On the same day, the House of Representatives held a party vote to renegotiate the aid proposal. The Democrats won 216-210 and no Republicans promised to back them.
The Federal Reserve printed more money in 2020 than the government issued in its first two centuries; At the time of writing, the total US debt is close to $ 28 trillion. This leaves the country with a debt-to-GDP ratio of over 130%, the highest in history by a wide margin.
Some believe that the Fed’s money printing practice ultimately benefits Bitcoin by creating real fear, uncertainty, and suspicion about the US dollar. Founder and CEO of Gemini cryptocurrency exchange Tyler Winklevoss has previously suggested that the Fed is actually preparing Bitcoin for a bull run every time it prints more money.
However, the bullish trend may not be as bullish as it seems. The number of dollars created in 2020 equaled nearly one-fifth of the total dollars. This inflation effectively deprives Bitcoin and other related cryptocurrencies of their purchasing power as they are still valued against the US dollar.
Biden’s proposed aid package is significantly less than the first $ 3 trillion he first offered in early January. Whether these efforts to stimulate the economy will greatly increase the price of bitcoin, it is notable that the value of the currency has risen 700% since the beginning of the COVID-19 pandemic.