January 15, 2021: Week in Review

New Money Traders | January 15, 2021

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Bitcoin Goes on a Wild Ride 

The World’s preeminent cryptocurrency is in the midst of a bull run. However, that doesn’t mean the traditionally volatile asset hasn’t seen a topsy turvy climb. Bitcoin is trading at around $37,000 per coin at the publication. Recently Bitcoin surged to $42,000 then dropped 30% overnight in a massive sell off. The asset remains highly volatile. According to James Surowiecki’s piece in Marker The Bitcoin Dream Is Dead, “Bitcoin was, after all, not designed to be a speculative asset. It was designed to be a currency, a new medium of exchange that people could, and would, use to transact daily business with each other”. To put this into perspective in an average day there are approximately 325,000 Bitcoin transactions, in contrast there are around one billion credit card transactions per day. The momentum of Bitcoin is to trade it as a commodity more than to use it as a traditional currency. Needless to say the value of a coin is likely to continue to climb, but not without some stumbles along the way. 

President Elect Biden Announces $1.9 Trillion Covid Stimulus Package 

The soon to be inaugurated Joe Biden spoke to the nation for about 30 minutes last night where he outlined his plans for a Covid relief bill he hopes to get through Congress in his first q00 days. The centerpiece of this plan for the average American is the addition of $1400 checks to be added to the $600 already sent out. Additionally, the bill raises the federal minimum wage to $15/hour and extends the moratorium on evictions and foreclosures through September. Biden also plans to put tens of billions into Covid testing and vaccine distribution. He pledged to get 100 million vaccines administered within the first 100 days. The initiatives laid out in the package are bold and it remains to be seen if Biden can achieve them. 

DJA Opens Down 300 
The Dow Jones Industrial Average opened down sharply and Wall St. is poised for a negative week. The December jobs report was bleak to say the least. Overall many analysts remain bullish on the stock market. While the market has priced in Biden’s aforementioned Covid stimulus plan there is likely nother on the way. With the huge expense of this plan coupled with a very ambitious spending plan from the Biden administration some people are asking how we are going to pay for all this new spending.

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