The bill includes the distribution of checks for USD 600 and USD 1,200, depending on income level. Those who are unemployed will receive USD 300 per week, until March 2021.
In recent days, Republican and Democratic lawmakers in the US Congress reached an agreement on a new economic stimulus package totaling USD 900 billion. Following the announcement, the price of Bitcoin, which had been declining, rebounded, and rallied by 3% to USD 22,890 within hours.
After a delay of several months, they completed the agreement just before the legislative vacation period began. Both houses approved it as this government´s funding period of this year legally expired.
The direct assistance to employees that the package contemplates depends on their income level. The government will distribute more than USD 160 billion through checks for USD 600 to those with annual incomes of up to USD 75,000 a year. Meanwhile, those who earn up to USD 150,000 a year will receive a check for USD 1,200.
Concerning the unemployed, the agreement contemplates that they will receive USD 300 per week until March 2021. That represents an amount of USD 120,000 million destined for that purpose.
Impact of New Aid on Bitcoin
The approval of the aid last March implied an unprecedented printing of money in the United States. As it is possible to observe in the evolution of so-called M1 money (circulating in banknotes and coins), there was an increasing trend in the prices of gold and Bitcoin. Investors interpret liquidity growth as a medium-term inflation stimulus and seek secure store-of-value assets.
The price of BTC, which was recently very close to USD 24,000, fell to USD 22,181 in the wake of the announcement. However, it had a 3.3% rally in a few hours until it reached USD 22,890, according to data from Messari. Regarding gold, the precious metal also had a rebound, going from USD 1,870 to USD 1,899.
An analysis by Marty Bent, in which he argues that the aid that last March’s aid in the United States reflects a transfer of wealth from the poorest to the richest. Bent showed that the evolution of aid proportionally boosted the valuation of companies in the S&P 500 index.
The author of the daily Bitcoin newsletter “Marty’s Bent” and host of the podcast “Tales from the Crypt” said that there is “a massive transfer of wealth from the poor to the rich taking place in real-time.” He commented that “people forced to stay at home without working received a check for USD 1,200 in March.” However, he notes that they “are not benefiting from the gains that the stock market has generated.”
Max Keizer recently said that only the inhabitants of Latin America were aware of the uncontrolled issuance of fiat money. However, he stated that the same was not the case with residents of the United States, since no one understands what happens when hyperinflation causes money to become worthless.
By Willmen Blanco
