The price of Bitcoin is still closely related to the movements of traditional stock markets.
The possibility of introducing a new stimulus package to help people in economic difficulty has been discussed for months in the United States. Today President Trump has decided to postpone the issue until the end of the elections: it seems that the news has brought down the price of Bitcoin (BTC) and traditional markets.
On Twitter, Trump wrote:
„Nancy Pelosi [Speaker of the U.S. House of Representatives] is demanding $2.4 trillion for a poorly managed, high-crime stimulus package for predominantly democratic states, money in no way related to COVID-19.
We made a very generous offer of $1.6 trillion but, as usual, he is not negotiating good faith. I have therefore decided to reject their request, I look to the future of our country.
I have instructed my representatives to interrupt the negotiations until the end of my election. Immediately after my victory, we will approve a large stimulus package addressed to the American workers and small businesses“.
The markets reacted negatively to the news. The value of the shares decreased significantly, while Bitcoin fell by $200 and then stabilized at about $10,600.
The sudden contraction of Bitcoin seems to suggest that the price of the asset continues to be closely linked to movements in traditional markets, at least as far as the big news of a fiscal nature is concerned. According to some, this is an antithetical behavior to the alleged role of the unrelated value reserve asset.
These users have fallen victim to a rather common dangerous practice in decentralized finance. Most DeFi protocols require authorization to withdraw unlimited amounts of a particular token from the customer’s wallet. As already reported by Cointelegraph, decentralized apps such as Compound, Uniswap, Kyber and others often require authorization for unlimited withdrawals. This allows smart contracts to transfer the entire balance of a particular token on behalf of the owner of each wallet.
Some wallets allow users to manually adjust the approved amount, although generally this parameter is set by default as the maximum possible value.
So it was with UniCats, explained Manuskin:
„Not only has the whole project turned out to be a rug pull and a scam, it’s also trying to subtract all the users‘ approved tokens“.
Translated with www.DeepL.com/Translator (free version)