Joe Biden’s recent budget proposal would result in significant budget deficits for the foreseeable future. Janet Yellen supported the measures, despite her admittance that it may affect inflation and interest rates. Several U.S. states are clamoring to lead the cryptocurrency revolution within the country by offering tax incentives and legal frameworks for investing. Notable investors, including Carl Icahn and Ray Dalio, are increasingly optimistic about Bitcoin, and FinTech companies continue adding support for Bitcoin.
Biden Pushes Several Spending Measures While The Economy Continues Its Recovery
The Biden administration announced a $6 trillion budget proposal with an expected annual budget deficit of $1.3 trillion. The plan includes increased spending on education, healthcare, and investments into renewable energy. Janet Yellen supported the proposed spending increases, stating that “these are investments our economy needs to be competitive and to be productive”. Senate Republicans have countered Biden’s $1.7 trillion infrastructure package with a proposal that allocates $928 billion to infrastructure development. Meanwhile, economic recovery is showing signs of being well underway; last week, jobless claims marked a post-pandemic low of 406,000. In addition, consumer spending rose 0.5% in April, and is now just 2% below the previous highs from February 2020. The S&P 500 posted a modest gain, and the Nasdaq saw significant price appreciation.
Several States Are Competing To Become Centers For Digital Asset Innovation
Colorado Governor Jared Polis wants Colorado “to be the first state to let you pay your taxes in a variety of cryptos.” Polis intends to make Colorado the “center for blockchain innovation in the United States”. Nebraska passed legislation which will allow banks to provide financial services for digital assets. Texas has also created a legal framework around cryptocurrencies, which will provide greater legal clarity for companies operating in the space and pave the way for future legislation. China is pushing forward with restricting Bitcoin usage by proposing penalties for companies and individuals who continue to engage in Bitcoin mining. Companies may face a loss of license to operate and lose preferential status from the government. The penalties are forcing many mining operations outside of mainland China, reducing centralization of Bitcoin mining operations.
Billionaire Investors Investigate Use Cases For Bitcoin
Carl Icahn has begun investigating an investment in the digital asset space. Icahn believes that cryptocurrencies are “here to stay in one form or another”, and intends to invest approximately $1.5 billion if he decides to move forward. Icahn added that “if we have inflation, we are going to be looking for other stores of value outside the US dollar.” Ray Dalio announced that he has “some Bitcoin”, and thinks that Bitcoin is a better way to hedge against inflation than bonds. Elon Musk and Michael Saylor met with North American Bitcoin miners to discuss promoting sustainable mining practices. The attending miners plan to publish their energy sources and usage, in an effort to encourage mining operations to use renewable energy.
Big Tech Companies Continue Adding Support For Digital Assets
PayPal is investigating ways to allow its client base to “transfer crypto to and from their PayPal addresses". Apple has listed a role for someone who can help the company with “alternative payments”, including digital wallets and cryptocurrencies. The job listing has renewed speculation that Apple will get involved with Bitcoin very meaningfully in the near future. Institutional cryptocurrency liquidity aggregator, Talos, raised a $40 million series A, led by Andreessen Horowitz. Sheetz, a convenience store chain, announced that it would begin accepting some cryptocurrencies, including Bitcoin.
Current fiscal policy from Joe Biden is likely to exacerbate the current and future inflation of the U.S. dollar. The inflation trend is accelerating Bitcoin adoption by individual and institutional investors. Many U.S. states continue putting forth legislation which will aid the adoption of Bitcoin within the country. China’s continued Bitcoin crackdown is scattering mining operations and increasing network security, which used to be highly concentrated within the country.