On Tuesday (March 9), the Bitcoin price is back above the $54,000 level for the first time since February 23.

Data by TradingView tells us that, on crypto exchange Bitstamp, around 3:32 UTC, the Bitcoin price surged above the $54,000 level for the first time in two weeks. Roughly two and a half hours later (at 6:04 UTC to be exact), the Bitcoin price had reached $54,500, which is currently today’s intraday high.

According to data by CryptoCompare, as of the time of writing (09:52 UTC), Bitcoin is trading around $54,162, up 8.52% in the past 24-hour period and up 86.94% since the start of 2021.

From a macroeconomic point of view, there are two explanations for Bitcoin’s strong performance today.

First, as you probably know already, on Saturday (March 6), the U.S. Senate passed a $1.9 trillion COVID-19 relief bill (“American Rescue Plan”).

Moments after this was announced, the Bitcoin price started rallying from around the $47,800 level and by 14:05 UTC on Sunday (March 7), on crypto exchange Bitstamp, the BTC price had reached $51,306.

Well, later today, it is expected that the U.S. House of Representatives, which is also controlled by the Democrats, will also pass this bill on Tuesday (March 9), after which it will be sent to U.S. President Joe Biden, so that he can sign it and make it into law.

This huge amount of fiscal stimulus, which will result in direct payments of up to $1,400 to most Americans within the next several days, basically devalues the U.S. dollar, and should result in higher prices for U.S. stocks and Bitcoin (and by extension, other cryptoassets since they tend to follow Bitcoin both on the way and on the way down).

In fact, according to data by MarketWatch, the U.S. Dollar Index (DXY) is currently (as of 10:01 UTC on March 9) at 91.97, down 0.37%.

Source: MarketWatch

Second, in the past 24-hour period, the prices of U.S. government bonds have been going up, thereby lowering yields, which is good news for risk assets such as stocks and crypto. For example, the U.S. 10 Year Treasury Note has come down from 1.602% at 20:50 UTC on March 8 to 1.543%, where it is as of 10:18 UTC on March 9.

Source: MarketWatch

As for Bitcoin, adoption is a stronger driver of its price. And yesterday, we had Aker ASA, a large Norwegian conglomerate, announce that it was establishing a subsidiary (Seetee AS) that would “keep all its liquid investable assets in bitcoin.”

In its letter to shareholders, Norwegian billionaire businessman Kjell Inge Røkke, who is the Chairman of Aker saidthat Aker had decided that not investing in Bitcoin would be the riskiest decision:

Risk is not an ob­vi­ous con­cept. What’s com­mon­ly con­sid­ered risky is frequent­ly not. And vice ver­sa. We are used to think­ing that cash is risk free. But it’s not. It’s im­plic­it­ly taxed by in­fla­tion at a small rate every year. It adds up. Cen­tral bankers have mag­i­cal­ly agreed that they should tar­get two percent in­fla­tion, which im­plies that one third of your mon­ey’s worth is taxed away every twen­ty years. If it was three per­cent, al­most half of it would be gone in that time.

He later added:

Last year, bit­coin made sig­nif­i­cant progress to­wards be­com­ing a main­stream in­vest­ment. When in­vestors with in­dis­putable track records, like Paul Tu­dor Jones and Stan­ley Druck­en­miller, dis­close that they have sig­nif­i­cant po­si­tions, every­body with a cu­ri­ous brain should pay at­tention. Com­pa­nies like Tes­la, Mass Mu­tu­al, Mi­cros­trat­e­gy, and Square have flagged po­si­tions, while Fi­deli­ty, Black­rock, Mor­gan Stan­ley, and oth­er as­set man­age­ment be­he­moths are working to launch in­vest­ment prod­ucts for cryp­tocur­ren­cies, which would make it eas­i­er for in­vestors.

On-chain metrics also suggest a bullish outlook for Bitcoin, with both Bitcoin balances on exchanges and BTC miners’ rate of selling going down, as pointed out by crypto analyst Lark Davis earlier today:

Featured Image by “SnapLaunch” via Pixabay.com

The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.