The US $6 trillion economic stimulus plan has an immediate effect, and Bitcoin may become the biggest winner

Over the past few weeks, the entire world, including the Bitcoin industry, has been disrupted by the outbreak of the coronavirus COVID-19. In fact, to mitigate the spread of COVID-19, national authorities were forced to take emergency measures, which closed thousands of businesses and caused millions of people to lose their jobs around the world. In short: the economic impact is huge.

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It’s no surprise, then, that governments have been forced to react. Canada announced an $82 billion stimulus package, the European Central Bank expanded its massive asset purchases and Hong Kong pledged to give each of its citizens HK$10,000.

But the United States plays a bigger game.

White House economic adviser Larry Kudlow announced at a press conference on March 24 that he believed the U.S. government’s economic stimulus package “will be around $6 trillion.”

The report shows that $2 trillion of the money (the U.S. Senate had already approved the plan as of press time) will be paid directly to businesses and individuals suffering under the pressure of the coronavirus outbreak, and the remaining $4 trillion will go to the Federal Reserve.

To illustrate what a staggering number $6 trillion is, we can see here: $6 trillion is equivalent to one-third of the entire US GDP and 130% of the Federal Reserve's balance sheet, enough for every person on the planet to get $850, or to buy 900 million bitcoins at current prices - of course, the total number of bitcoins is not 900 million.

Good news for Bitcoin

While none of this stimulus will go directly to Bitcoin, analysts believe the money will only significantly increase the value proposition of Bitcoin and other cryptocurrencies.

Well-known market analyst and podcaster Preston Pysh recently commented on the importance of the US trillion-dollar economic stimulus package to Bitcoin during his podcast with Morgan Creek Digital founder Anthony Pompliano.

Regarding the thousand-dollar checks that the U.S. government is about to send to American households, Pysh pointed out that many millennials are ready to allocate a considerable portion of these checks to Bitcoin because they see the value of this technology and a reliable digital currency in this digital world where scarcity is fleeting.

More broadly, analysts believe the stimulus could drive higher inflation rates similar to those seen after the abolition of the gold standard.

BitMEX Research wrote in a recent report that given the influx of monetary and fiscal stimulus that has already begun, Bitcoin is likely to see a significant appreciation:

“We believe that this shifting economic regime, where the economy and financial markets are on the loose with no significant anchors at all, not even a specific inflation target, is perhaps the biggest opportunity Bitcoin has seen in its short history.”

Su Zhu, CIO and CEO of Three Arrows Capital, supports this. According to previous reports, investors believe that the US dollar is on an inflationary path and it is "difficult to fall back", which is likely a factor that prompted Bitcoin to rebound to "$50,000" at a relatively fast speed.