As the US Injects Trillions Into the Economy, Bitcoin Price Likely to Be Affected

Policymakers worldwide are allocating substantial amounts of new funds to avert a looming recession, or potentially a full-blown depression. In the United States, the Senate approved a $2 trillion stimulus package in late March. Following that, the House of Representatives has now endorsed a proposal from House Democrats for an additional $3 trillion to support the needs of Americans experiencing an unemployment rate nearing 15%. In response to the COVID-19 pandemic, the Federal Reserve has initiated an unprecedented series of quantitative easing measures.

As the central bank responsible for the world’s reserve currency, the Federal Reserve employs quantitative easing to inject fresh liquidity into the economy. With control over money creation, the Fed has the capacity to produce as many dollars as necessary, which it then infuses into the financial system by buying assets on the open market.