On Wednesday (October 21), the Bitcoin price went above the $12,300 for the first time in over two months after we got encouraging comments about the state of the COVID-19 fiscal stimulus talks between the Democrats and the Trump administration.
At around 04:30 UTC on October 21, the Bitcoin price reached a high of $12,310, and at the time of writing (07:25 UTC) Bitcoin is trading at $12,210, up nearly 4% vs USD in the past 24-hour period.
This is the highest level the Bitcoin price has seen since August 18 as you can see in the three-month BTC-USD price chart below:
U.S. stocks should also benefit from this renewed optimism about the COVID-19 stimulus talks in Washington once the U.S. stock market opens later today, especially if we get more encouraging news about these negotiations. Currently (as of 07:32 UTC or 03:32 EDT), the futures for the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are all trading in green territory, up 0.28%, 0.31%, and 0.24% respectively.
The optimism about a U.S. fiscal stimulus deal before the U.S. presidential election seems to have increased investors’ appetite for risk in the past few weeks, which has resulted in less interested in the U.S. dollar (traditionally, the most popular safe haven in times of turmoil).
According to data from MarketWatch, since September 25, the U.S. dollar index (DXY) has fallen from 94.64 to 92.82 on October 21 (at 03:47 EDT), which is the lowest it has been since September 4.
So, what is behind the renewed hopes of a U.S. fiscal stimulus deal within the next few days?
On Tuesday (October 20), Mark Meadows, the Chief of Staff at the White House, during an interview with CNBC, gave an update on the state of the talks between House Speaker Nancy Policy and U.S. treasury Secretary Steven Mnuchin:
“Well I just got off the phone with Secretary Mnuchin. As you know, he had about a 45-minute phone call with Speaker Pelosi… We made good progress and even further progress today. We still have a number of open items that still remain as of today…
“We still have a ways to go, but I would say that the conversations today were productive enough to continue to have a discussions tomorrow, which the speaker and the secretary plan to do exactly that tomorrow afternoon.”
And last night, Pelosi sent a letter to her Democratic colleagues to update them on the status of her talks with Mnuchin:
“Since Sunday, we have been making some progress in setting forth areas of agreement and disagreement in order to decide how we can reach a compromise.
“Today, Secretary Mnuchin and I spoke at 3:00 pm. Our conversation provided more clarity and common ground as we move closer to an agreement. Today’s deadline enabled us to see that decisions could be reached and language could be exchanged, demonstrating that both sides are serious about finding a compromise.
“On several open questions, the Secretary and I called for the committee chairs to resolve differences about funding levels and language. Hopefully, we will receive this guidance soon so that the Secretary and I can continue our discussions tomorrow afternoon upon his return…
“I remain hopeful that we can reach an agreement before the election. It will be safer, bigger, and better, and it will be retroactive.”
Although Pelosi has not not made any significant compromises so far and the majority of Senate Republicans do not seem too interested in a roughly two trillion dollar COVID-19 relief package, both Trump and Pelosi are under huge pressure to make a deal within the next few days and if they do, it is hard to imagine Senate Republicans refusing to go along with it.
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.
