Bitcoin, a perceived store of value asset, traded higher on Sunday, with U.S. President Joe Biden on the verge of passing an historic $1.9 trillion fiscal stimulus plan aimed at accelerating economic recovery.
The top cryptocurrency is changing hands near $50,500 at press time, representing a 4% gain on the day, having clocked a high of $51,320 early today, according to CoinDesk 20 data.
The Senate approved Biden’s stimulus plan on Saturday, paving the way for $1,400 checks and continued jobless aid. The bill heads back to the House of Representative where will be voted on Tuesday, according to media reports.
Improved prospects of fiscal spending look to have put a bid under bitcoin (BTC), waking it up from the two-day slumber in the range of $49,500 to $46,200. Fiscal spending is inflationary and often bodes well for the store of value assets such as bitcoin and gold.
Also adding wind to the cryptocurrency’s sails was news that Hong Kong-listed Meitu, which makes image and video processing software, said it had purchased $22 million in ether (ETH) and $17.9 million of BTC for its treasury.
Bitcoin’s rise portends dollar weakness in the foreign exchange markets and improved risk sentiment in the stock markets on Monday. The cryptocurrency has largely moved in the opposite direction to the dollar and behaved more or less like stocks/risk assets since the March 2020 crash.
It remains to be seen if bitcoin can extend gains during the week ahead, as the stimulus approval could lift U.S. Treasury bond yields. The 10-year yield has been on a tear of late, pricing a strong rebound in the economic activity and high inflation and putting downward pressure on both bitcoin and stocks.
Aside from bitcoin’s rise, the other important story of the weekend is the decentralized finance (DeFi) protocol Uniswap’s UNI token’s entry into the list of the top 10 cryptocurrencies by market capitalization. It’s the first DeFi coin to achieve that feat.
UNI is currently trading near $32 – up nearly 14% on a 24-hour basis. With a market cap of $16.79 billion, the DeFi token is now the eighth-largest cryptocurrency and ranks higher than litecoin and chainlink, as per data source Messari.