Tags: Bitcoin Price, Crypto Market, US Stock Market
Bitcoin’s realized capitalization has increased by more than 50%, Bitcoin

10% of Americans Will Use Stimulus Checks to Buy Bitcoin

Billions of Americans will receive a new stimulus check as part of a bill to alleviate the crisis that the pandemic generated. This is a total of $1.9 trillion signed by President Joe Biden last week.

The third such stimulus check, worth $1,400 for those making less than $75,000 per year, comes as bitcoin and the stock market soared in recent months.

About 10% of the funds (nearly $40 billion of the $380 billion in direct stimulus check deposits) can be used to buy bitcoin and stocks. The recipients prefer to go for cryptocurrency.

Dan Dolev, managing director of Mizuho Securities, stated that the investment bank surveyed more than 200 people. These people expect to receive the third round of stimulus checks this week. Mizuho surveyed 235 people with less than $150,000 in family income. The survey reveals that two in five recipients expect to invest a portion of their checks in bitcoins and stocks.

Slightly more than one in ten people said they planned to use between 20% and 80% of their stimulus check to invest in the stock market or bitcoin. Meanwhile, 2% expect to allocate 80% or more. Mizuho’s analysis found that bitcoin investing stimulus checks could add between 2% and 3% to the current market value of $1.1 trillion of bitcoin.

Don’t Invest More than You Can Afford to Lose

The price of bitcoin has skyrocketed 1000% over the past year. It rose along with the stock market as governments worldwide flood financial systems with freshly printed cash. They did this to prop up economies devastated by coronavirus shutdowns.

Bitcoin rose to more than $60,000 last week after starting 2021 at around $30,000. Institutional adoption from Wall Street, corporate interest from people – like Tesla CEO Elon Musk, and retail traders that accumulate in the market drove the rise.

The analysis shows that if people had used their first $1,200 stimulus check, distributed since April last year, to buy bitcoins, it would now be worth a little more than $10,000.

However, with bitcoin’s highly volatile nature, specialists warned people not to invest more than they can afford to lose. Alex Mashinsky, CEO of New York-based cryptocurrency rewards platform Celsius Network said if you need to pay rent or have maximum credit cards, you shouldn’t buy bitcoin with your stimulus check. Hunter Merghart, head of US operations at Luxembourg-based Bitstamp, believes that bitcoin can be part of a diversified portfolio to understand that, as with any investment, there is a risk.

He still sees bitcoin as a risky gamble more than anything else. He mentions that any investor should understand that volatility is likely to be higher. However, the potential for returns also resembles risk returns.

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