After an unexpected market collapse in March 2020, Donald Trump, President of the United States, signed a monumental stimulus bill worth close to $2.2 trillion. The $1200 stimulus check was sent to every individual and small business in the U.S. across the nation.
On 22 June, President Trump was asked about the 2nd round of stimulus payments and he responded in anticipation that another stimulus check was on the way. The announcement received a response from Jay Hao, CEO of OKEx Exchange, who believed that another Bitcoin price rally could be driven by the second round of stimulus.
In a recent LinkedIn post, Hao stated that during the 1st round of stimulus payments, Bitcoin ‘s valuation had jumped by 58 percent from $6,500 to $10,450, and expected a similar turn of events with the 2nd round of stimulus payments.
He added that two major aspects may come into play during this time, which include institutions and retail interest in Bitcoin. Taking Grayscale’s example, he said,
“According to the trust’s latest investment report released on June 19, its current total investment in the digital currency is $3.90 billion, of which Bitcoin shares account for 88.8% (about 369,368 BTC).”
Hao believed that Grayscale’s accumulation spree was a direct indication of the increased rate of institutional adoption of Bitcoin. Although there is no concrete evidence that Grayscale Bitcoin Trust is a publicly traded investment vehicle in the U.S. where institutions can invest in Bitcoin, Hao ‘s comment made sense.
With Federal Reserves recently revealed that banks currently had an abundance of cash, OKEx ‘s CEO suggested that further capital flow would allow retail investors to recognize Bitcoin as an alternative investment. With major banks offering extremely low-interest rates, Bitcoin appeared to be the ideal form of investment for higher ROIs.
$1200 worth BTC deposits spiked during 1st U.S Stimulus payments
It is worth noting the fact that during the 1st round of stimulus checks, Brian Armstrong, CEO on Coinbase revealed a chart that identified a spike in $1200 deposits on his exchange. Binance US had also reported that users were depositing $1200 increments on the U.S division on the exchange.
Considering Bitcoin had generated such interest when the asset was involved with extreme volatility, the recent stability attained by BTC may improve upon this sentiment of people. Hao’s comment may ring true in the aspect, and another price rally for Bitcoin could possibly surface after the 2nd round of stimulus is activated across the U.S states.