Millions Tempted By Stimulus Check Bitcoin Bet After Sudden Price Surge

Millions of Americans are set to receive a new stimulus check as part of a $1.9 trillion coronavirus relief bill signed by President Joe Biden last week.

The third such Covid-19 stimulus check, worth $1,400 to those earning less than $75,000 per year, comes as the cryptocurrency bitcoin and the stock market have soared over the last few months.

Ahead of the latest stimulus check hitting bank accounts, survey results have shown around 10% of funds — nearly $40 billion of the $380 billion in direct stimulus check deposits — may be used to buy bitcoin and stocks, with stimulus check recipients found to prefer bitcoin.

“We surveyed over 200 individuals who expect to receive the third round of stimulus checks this week,” wrote Dan Dolev, managing director at Mizuho Securities, which carried out the research. Mizuho polled 235 people with less than $150,000 of household income. “The survey reveals that two out of every five [stimulus check] recipients expect to invest some portion of their checks in bitcoin and stocks.”

Bitcoin was found to be the preferred investment choice among stimulus check recipients, comprising nearly 60% of the incremental spend. The survey results suggest as much as $25 billion from stimulus checks may be used to buy bitcoin — with $15 billion set to go toward stocks and shares. Just over one in ten people (13%) said they planned to use between 20% and 80% of their stimulus check to invest in the stock market or bitcoin, while 2% expect to allocate 80% or more.

Analysis by Mizuho found stimulus check investment into bitcoin “could add as much as 2% to 3% to bitcoin’s current $1.1 trillion market value.”

The bitcoin price has soared by 1,000% over the last year, climbing along with the stock market as governments around the world flood financial systems with freshly-printed cash in order to prop up economies ravaged by coronavirus-induced shutdowns. Bitcoin surged to over $60,000 last week after starting 2021 at around $30,000, spurred on by a combination of Wall Street institutional adoption, corporate interest from the likes of Tesla chief executive Elon Musk, and retail traders piling into the market.