Less than 1% of the amount of stimulus checks that benefit Americans would be enough to increase the price of Bitcoin (BTC).
That was according to estimates circulating on Twitter this week, which suggest that the amount of Bitcoin generated this year could be bought with less than 1% of the $478 billion that the U.S. government will give its citizens in its economic stimulus program.
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Matthew Kaye, managing partner of the Blockhead Capital hedge fund, said today that an average BTC/USD price is estimated at $10,000 this year.
The miners will generate 328,500 BTCs, which at $10,000 totals $3.285 billion. The total value of the two rounds of stimulus checks is $478 billion, according to Treasury Secretary Steven Mnuchin’s latest booklet comments.
Therefore, to keep the price of Bitcoin where it is, only 0.68% of the stimulus money would be required to buy the total amount of Bitcoin mined this year.
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The equation is favored by Bitcoin’s halving earlier this month, which reduced the amount of new money thrown per block by 50% and inflation to 1.8%.
Kaye admitted that he „doesn’t expect“ Americans to actually buy Bitcoin in such amounts with their checks. However, as reported by Cointelegraph, the exchanges noted an increase in purchases after the first check for $1,200 was given.
Kaye summarized in additional comments:
„I don’t expect 1% of beneficiaries to buy Bitcoin Future Software, Crypto Trader Software, Crypto Investor Software, Bitcoin Loophole Software, Bitcoin Capital Software, I’m just making the point that the high money supply will increase asset prices.“
The U.S. money supply is up 18%
The increase in the money supply has been a focus for some authors this week, including Cointelegraph Markets‘ analyst known as Filbfilb .
The Telegram trading channel’s charts showed that M2 is now up 18% from October 19th last year.
The recovery in the Standard&Poor 500 index seems to be more promising when M2 is used as the denominator.
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At the same time, it was shown that the Bitcoin miners were selling less overall, with the decline in the outflows of the mining group. The analyst PlanB, creator of the S2FX BTC price forecasting tool, described the behavior as „stock-to-flow in action“.