OKEx CEO says second U.S. stimulus plan could boost Bitcoin price

Jay Hao, CEO of the OKEx crypto currency exchange, said that a second stimulus plan in the US could result in a rise in the price of Bitcoin (BTC).

In a June 22 LinkedIn posting, Hao explained that since the first $2.2 billion stimulus plan was signed in late March, Bitcoin has increased by 58 percent, from $6,580 to $10,400. He cited a recent Bloomberg article reporting that Trump administration officials expect to spend $1 billion more to stimulate the U.S. economy in the midst of the coronavirus crisis:

„Will the second stimulus continue to drive Bitcoin price growth? In my opinion, it is quite possible.

Hao noted that Grayscale’s investment fund acquired 80 percent of the newly mined Bitcoin, which, he said, „directly reflects Bitcoin’s institutional adoption rate.

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Second, he said he expects retail investors to be even more interested in Bitcoin, adding, „When it comes to retail investors, I think these will be the main drivers of Bitcoin’s price increase in the second round of stimulus.

Hao explained to Cointelegraph that it is currently difficult for institutional investors to know where to invest their dollars. He believes the stock market is inflated, so even stocks are high risk for now.

„Institutions will look for the best rate of return over time, and Bitcoin has proven to be consistent here, as Paul Tudor Jones called it: ‚the fastest horse. Once again, of course, institutional investors will spread their risks across several assets,“ he said.

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Hao says that, in many cases, the recipients did not spend the first round of stimulus, but kept it up due to the uncertain economic climate. He cited a recent CNBC article showing that bank deposits grew by $865 billion in April alone, setting a new record for the year.

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Hao also suggested that since the stimulus consists mainly of cash payments to individuals and loans to small businesses, retail and institutional investors will have more capital to invest in Bitcoin:

„If more money comes into the market, which leads to more money being held by retail investors under the second stimulus, I think they are likely to use Bitcoin as an alternative investment. After all, where else can they get a good return on their savings? Interest on bank savings is extremely low, already around zero.

Hao pointed to the stablecoins as an alternative. He explained that investors can buy them and „put them in a high interest savings account, which can yield between 7 and 12%.

„However, this is not something that will happen overnight, but I think we will see more and more people crossing over into the kryptonie, which means that other kryptonies could also become attractive and many people may want to transfer their fiat currency to stablecoins to earn a high level of interest,“ he added.

Hao said the current situation does not favor low-risk approaches, but admitted that these instruments could still play a role.

„If retail investors are concerned about the effects of inflation and do not want to leave their money in a bank, an instrument such as savings bonds or certificates of deposit will hardly work, but will guarantee payment of inflation.