With Biden at the helm, what changes for Bitcoin?

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Source: Unsplash

Donald Trump is no longer President of the United States. Democrat Joe Biden is the 46th President of the United States and Janet Yellen is the Treasury Secretary in his administration. Despite a change in government, the underlying problems in the economy remain the same. The question thus is – Does this change the trajectory of Bitcoin ^[1]?

U.S Federal Debt: Where are we now?

The first round of stimulus began back in 2020 during the peak lockdown period. With the country being shut for a huge part of the year, the stimulus could not boost the GDP. In fact, this resulted in a record-high – 130% of debt to GDP ratio.

Source: Ecoinometrics

When compared to the 2008 crisis, it can be estimated that once the U.S Debt to GDP ratio spikes, it hardly ever comes down. With another stimulus around the corner, the Federal Reserve will continue to buy the debt.

Source: Ecoinometrics

According to a recent Ecoinometrics report ^[2], the Federal Reserve has the largest ownership of debt growth since 2020. Now, the Federal Reserve actually does not have to buy the bonds issued by the U.S treasury, but it does it to absorb the debt. And, how does it do it? By just running the money printer. In fact, since the end of 2019, the Fed Reserve has bought over $2.5 trillion worth of U.S Treasury bonds,

With Biden at the helm, what changes for Bitcoin?

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