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Market Musings

Bitcoin Has a Painful End to the Week — Despite Biden's Big Announcement

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Published on:
January 15, 2021

Joe Biden's new stimulus package has been described as "another multitrillion-dollar advertisement for Bitcoin."

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Bitcoin has had a painful end to the week — falling by about 10% despite Joe Biden unveiling a coronavirus stimulus package worth $1.9 trillion.

 

The world’s biggest cryptocurrency tumbled to lows of $35,433 at one point, prompting concerns that we could see a return to $30,000.

 

It’s a stark contrast from Thursday, when Bitcoin had managed to near $40,000 again — sparking hopes that another new all-time high could be on the horizon.

 

Although there might be some turbulence in the short term, analysts maintain that this is still healthy activity for BTC, as it establishes clear support levels.

 

On Thursday, Gemini’s co-founder and CEO Tyler Winklevoss described the president-elect’s COVID-19 relief plan as “another multitrillion-dollar advertisement for Bitcoin.”

 

Many countries around the world have embarked on aggressive quantitative easing measures as they try to mitigate the economic impact of the pandemic — effectively printing new money and devaluing the currency that’s already in circulation.

 

All of this has contributed to the narrative that Bitcoin is an effective store of value because it has a fixed supply of 21 million coins.

 

Unfortunately, there appeared to be little interest in Biden’s announcement in the crypto markets — potentially indicating that traders may be waiting for something a little more tangible.

 

Elsewhere in the crypto markets, ETH was down about 5% over the past 24 hours, with the world’s second-largest cryptocurrency giving back the gains it has seen over the past week.

 

Many other altcoins were also in the red, but their sell-offs were not as severe as Bitcoin.

 

The one exception has been Polkadot, which is up 7.44% on the day and 45.59% on the week. It is trading at a new all-time high of $13.60, and is just $2.5 billion short of overtaking XRP as the world’s fourth-largest cryptocurrency.

 

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