US congressional leaders agree on $2tn stimulus deal

U.S. Congress has reached agreement on a historic $2 trillion stimulus package to help combat the economic woes brought about by the coronavirus. The legislation still requires formal approval, but the deal which amounts to the largest stimulus package of all time could calm investors who have seen equity markets drop nearly 30% over the course of the last month. The bill will include large corporate bailouts, lines of credit for small businesses, direct compensation for individual families, and four months extended unemployment insurance.

Why it matters

• Bitcoin, and most financial assets for that matter, have become increasingly correlated with the broader equity markets as investors are selling everything in the midst of a dramatic liquidity crunch. The uncertainty that has gripped the financial world has led to a converging on this "dollar trade," however, this new round of stimulus should, in theory, provide financial markets more confidence to begin reallocating their dollars. If this were to occur, you could expect a decoupling of disparate financial assets including bitcoin from the equity markets. If history is any guide, this reallocation is likely to go towards "safe-haven" assets such as gold and what many in crypto believe would be bitcoin.
• As clearly laid out in the genesis block, Bitcoin was created in response to central banks around the world conducting irresponsible monetary policies. The global financial system was bailed out at the expense of taxpayers who were left footing the bill. This massive stimulus package, while intended to prevent further economic despair, will similarly need to socialize the losses as value cannot simply be created out of thin air. Bitcoin was created for this exact environment by providing an opt-out for those who do not believe in the sustainability of this fiat system.