$40 billion of the Stimulus Package could go into Bitcoin
The recently passed Stimulus Bill could have some impact on the crypto and stocks market
US President Joe Biden recently signed off on a $1.9 trillion Stimulus bill that stipulates that US citizens earning less than $80,000 will be eligible to receive a $1,400 coronavirus relief package. The stimulus package is currently rolling in as some people have reported that they’ve already received their payments. Financial experts are convinced that some families may choose to invest part of their payments to get more gains.
Investment banking firm Mizuho Securities yesterday published a survey that included more than 235 respondents expected to receive the payments. According to the survey, 10% of respondents (representing nearly $40 billion) are looking to invest in Bitcoin with their payouts.
It further details that some will also be looking to get into the stock market to invest the payments received from stimulus checks. Those interested in Bitcoin are the bulk majority making the crypto asset the more likely option. A cited case study confirmed that the flagship cryptocurrency could make up for more than half of the total incremental spend.
The banking institution believes that these Bitcoin buys resulting from the $1,400 checks will also drive the Bitcoin market capital by about 3%. The current BTC market cap as of writing is slightly above $1 trillion. Mizuho analysts reported, “Bitcoin is the preferred investment choice among check recipients. It comprises nearly 60% of the incremental spend, which may imply $25 billion of incremental spend on Bitcoin from stimulus checks. This represents 2—3% of Bitcoin’s current $1.1 trillion market cap”.
Bitcoin’s latest rally and overall surge this year could push more people into crypto as the digital asset has, for the most part, been a success. Though it comes with some risk, its huge potential reward makes it a preferred option to many.
Some industry experts have claimed that the stimulus Bitcoin purchase might push the crypto towards a new all-time high. The prediction is not far-fetched, considering the market sentiment at the moment is bullish.
However, the Japanese bank isn’t the only one that believes a portion of the stimulus will be directed into the stock market. Goldman Sachs also argues that a significant chunk of the stimulus payout will end in the stock market. David Kestin, a strategist at the investment bank and financial services company, explained that Americans receiving the payments would provide the biggest equity demand.
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Sam Grant, @KhareemSudlow
