Will they or won't they? Next round of Stimulus in question...
What Bitcoin does in the near term may depend on what happens in Washington...
Will they or won't they?
That is the question (in reference to another stimulus plan) being asked by the American people as congress returns from their Cabins in Idaho and Wyoming.
After failing to come to terms on another round of stimulus congress went on vacation for the past 3 weeks or so.
And guess when markets fell out of bed?
You guessed, while they were gone and no deals were being made.
Well, now they are expected to be back in session starting Tuesday (tomorrow they will still be fishing and BBQing out at the lake).
The stock market and possibly the near term fate of bitcoin hangs in their balance.
Will they come to terms on another round of stimulus or will the let the American people suffer even more than they already have?
At this point just about all of the prior stimulus has run out...
The beefed up unemployment aid ran out at the end of July, though Trump has been able to add about $300 to what people qualify for through executive order.
Over half of the states are still yet to ship that out to people, however.
The stimulus checks have mostly all been spent with over half of them being used on essential items...
The eviction/foreclosure moratorium has lapsed, though Trump tried to do something to help with that via executive order but the legality of it is highly debatable.
Businesses have trimmed all that they could trim and are starting to lay off workers, not because they are being forced to shut down, but because there is no real demand for their services.
The airlines being the biggest example of this with American Airlines announcing they would be laying off or furloughing 40,000 employees in the coming weeks without government assistance.
Basically, the real pain economically is just now going to be felt if the government doesn't act and that is preemptively being reflected in the equity markets as well as the crypto markets.
It's a major reason why the markets have been pummeled the last several days.
The saving grace for both parties coming together on a deal was the fact that we had the government coming up against the debt ceiling by the end of this month.
The thought process was that one side of the other would use the debt ceiling debate as a way to get their version of the stimulus bill passed, however, that is now out the window as well.
The Treasury Secretary announced that both sides have agreed on a deal to fund the government through the end of this year:
Of course they did...
So, they can't come to terms on a deal to benefit the American people, but they sure got together quickly on a deal that impacts their paychecks.
Funny how that works.
With the election now less than 2 months away, there is a very real possibility that we don't see another round of stimulus at all before then, if ever.
Neither side wants to benefit the other side with the election being this close and it will make it extremely difficult to get much of anything done.
And unfortunately that may spell trouble for risky asset markets, which crypto has been trading like as of late.
My advice is to stock pile whatever cash you can get your hands on see how this plays out, if things go how they are starting to look there is a very real possibility we could see more pain in the coming weeks.
It's always good to have dry powder in situations like that.
That being said, previous patterns and trends would not be broken if bitcoin dips further here or doesn't dip further here.
As I mentioned in a previous post, bitcoin had two 30% corrections in early 2017 as well, which more or less falls in line with where we are right now as far as this bull market cycle would compare.
Stay informed my friends.