Bitcoin mania: Crypto king’s price surges to two-week high; tops $54,000 following US stimulus package

After topping the $58,000 level last month and cratering to the $43,500 mark on February 28, bitcoin on Tuesday significantly recouped losses with a two-week high rally. The price was hovering near $54,800 on Tuesday evening, according to the data from CoinDesk, surpassing the peak price of $54,615 on February 23 on the back of investors’ interest and the stimulus package from the US government. “The recent bitcoin rally above $54,000 is because of the $1.9 trillion stimulus package announced by the US Senate. The stimulus package is expected to drive economic recovery across sectors in the US as it provides direct benefit transfer to individual US citizens, unemployment benefits, and support to state governments,” Shivam Thakral, CEO BuyUcoin told The Outlooker Online.

A similar effect was visible on cryptocurrencies and stocks last year as well. When the US Congress had passed the $484 billion Covid relief package in April last year, it coincided with the jump in bitcoin from over $6,900 to nearly $9,000, showing the effect of the bill on investors’ appetite for risks involved in cryptocurrencies. Likewise, the $900 billion second stimulus announced in December was followed by the jump in bitcoin prices from over $23,000 to nearly $29,000 on December 31, 2020.

Institutional investors too have been upbeat about bitcoin. Recently Norwegian conglomerate, Aker ASA engaged in offshore fishing, construction, and engineering had announced its plans to induct bitcoin into its business operations, “which has pushed the bitcoin price above $54,000,” added Thakral.

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Also, the US-based provider of technology and investment solutions for bitcoin NYDIG on Monday had announced $200 million fundraising led by strategic partners Stone Ridge Holdings Group, Morgan Stanley, New York Life, MassMutual, Soros Fund Management, and FS Investments. As an example of accelerating institutional bitcoin adoption, NYDIG announced that life, annuity, and property and casualty insurers owned, in aggregate, over $1 billion of direct and indirect bitcoin exposure facilitated exclusively by NYDIG.

“In terms of kind of institutional demand, we have seen no signs of that abating…We see a huge amount of demand institutionally, but we’re also seeing that reflected in the private wealth management space as well,” said Mathew McDermott, Head of Digital Assets for Goldman Sachs’ Global Markets Division in a podcast on Friday. “2017 was very much a retail-driven market. This time around as mentioned, we’ve just seen a huge volume of institutional demand across the broad spectrum of different industry types,” he added.