In the United States of America, the money printer has gone
As U.S. President Joe Biden's new $6 trillion government spending budget proposal is published, Bitcoin (BTC) may get a lift to eventually break through $40,000 at the expense of the US dollar.
According to The New York Times on May 27, the US president will present a vast fiscal strategy on Friday, the greatest since World War II, to secure investments in major infrastructure, education, and healthcare initiatives.
In 2022, Biden is said to want the federal government to spend $6 trillion. By 2031, he wants to increase overall expenditures to $8.2 trillion.
To pay his big spending package, Biden previously suggested large tax increase on America's wealthiest firms and individuals. However, according to him, the government's budget imbalances will not be reduced until at least 2030. As a result, the US would be saddled with a massive debt load as it borrows money to fund Biden's record pledge.
According to recent history, this circumstance is a great bullish backstop for Bitcoin. As the US government boosted up expenditure to unprecedented levels to treat the coronavirus, the decentralized cryptocurrency gained 1,582 percent from its $3,858 low in March 2020.
The US dollar strength index, or DXY, which measures the strength of the greenback against a basket of leading international currencies, on the other hand, plummeted by up to 13.38 percent after peaking in March 2020 amid the worldwide market crisis.
Meanwhile, Anthony "Pomp" Pompliano of Pomp Investments, a well-known Bitcoin lobbyist and investor, forecasts significant reductions in dollar bids.
"The administration is seeking to further indebt our country while simultaneously depreciating our currency," Pompliano remarked. "Historians will record that the government hastened the demise of the world's reserve currency as citizens cheered them on."
Other analysts chimed in, recommending Bitcoin as a hedge against a steepening US debt curve due to its fixed supply.
Bitcoin reclaims $40,000 from its previous owner.
Early morning anxieties were sparked by the New York Times' story, as the DXY dipped 0.01 percent at the New York opening bell, while Bitcoin regained $40,000.
The BTC/USD exchange rate tested its 200-day simple moving average (200-day SMA; the orange wave in the chart above) for a breakout move to the upside, which is currently hovering around $40,756.
If accomplished, a closure above the pair's 20-day exponential moving average (20-day EMA; the green wave) — approximately $43,655 — would reaffirm the pair's short-term bullish bias.
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