Bitcoin drops ahead of Biden’s budget announcement

Joe Biden

Oh boy, here we go again! In a confounding development, Bitcoin is nursing losses on Friday, ahead of US President Joe Biden releasing his first full budget later in the day.

But that was not enough to fuel a rise in BTC price, despite hopes of more inflation boosting stimulus to come in the United States. The leading cryptocurrency is changing hands near $35,800 at press time, representing a 7% drop on the day.

This latest decline comes a day after buyers failed to establish a foothold above the $40,000 mark for the world’s most valuable cryptocurrency.

Getting back to the budget, Biden is seeking $6 trillion in federal spending for the fiscal year 2022 and wants to see this upped to no less than $8.2 trillion by 2031, with deficits running above $1.3 trillion throughout the next decade.

The proposal shows that the Biden administration remains undeterred by recent inflation fears, and is unlikely to close the liquidity tap anytime soon. Trillions of dollars have already been pumped into the system to counter the economic effects of the coronavirus pandemic since March 2020.

All this should have been a bullish development for Bitcoin, which is widely touted as the digital gold.

But interestingly, the prospect of more liquidity is pushing stocks higher. Futures tied to S&P are hinting at a positive start to trading on Friday, with a 0.5% gain.

Bitcoin fell sharply from $58,000 to nearly $30,000 earlier this month after Tesla suspended vehicle purchases with the cryptocurrency, citing its high energy footprint and environmental concerns, none of which are new questions for the original crypto that started it all.

How it ends the month now, is the question!


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