Bitcoin and major cryptocurrencies including ethereum, Ripple’s XRP, litecoin and chainlink are eyeing two huge pillars of support in the run up to Christmas.The bitcoin price, boosted along with equity markets by massive government stimulus measures throughout 2020, last month climbed back to its 2017 all-time highs of around $20,000 per bitcoin.Now, after a bipartisan group of lawmakers outlined details of a $908 billion stimulus package on Monday, traders are closely watching for fresh guidance from the U.S. Federal Reserve on its emergency bond-buying programme as its two-day meeting kicks off today.
Lawmakers in Washington have finalized a $908 billion coronavirus aid framework, although hurdles remain and the bipartisan group faces an uphill struggle to get leadership from either party to agree to the stimulus bill—something the group wants before the end of the year.Meanwhile, the Fed is this week expected to signal it will continue the $120 billion per month of debt purchases it launched at the start of the pandemic until the recovery meets certain conditions at the conclusion of its two-day policy meeting tomorrow.
The language will replace the ‘over coming months’ guidance and offer the Fed more flexibility on the timing of tapering as the economic outlook evolves,” Morgan Stanley MS +3.3% economists wrote in a recent note.The rising possibility of a new stimulus deal, combined with further action from the Fed, is keeping investors on their toes this week.
With a huge amount of bitcoin in circulation right now, I expect to see the bitcoin price hold tight this week, wavering in the $19,000 range,” Artur Schaback, the co-founder of peer-to-peer bitcoin and cryptocurrency exchange Paxful, said via email.Next week, maybe be a different story though. As the Santa rally continues, we may be looking at a significant price correction,” Schaback said, adding “it is time for sell-offs.
Looking to next year, the bitcoin and cryptocurrency community is feeling bullish due to a combination of government stimulus money flooding the system and bitcoin’s continued development as a safe-haven asset.Bitcoin should have a great year thanks to the macro conditions caused by the massive government stimulus packages of 2020,” Ilia Maksimenka, the chief executive of Estonia-based cryptocurrency wallet provider and decentralized finance platform PlasmaPay, said via email, adding the huge injection of cash into the system has also boosted bitcoin’s reputation as digital gold.
The indicators for bitcoin in 2021 are extremely positive. With governments around the world printing huge sums of money in response to the Covid-19 pandemic, the macro trends for fiat against bitcoin strongly favour ‘digital gold’ over the coming year.