Will the U.S. $1900 billion stimulus package benefit Bitcoin? The U.S. administration will write $1,400 checks to millions of Americans. And many will flock to Bitcoin.
Will the $1900 billion U.S. stimulus package be a serious boost to Bitcoin’s price? At least that’s what a 235-person survey conducted by Mizuho Securities suggests.
Millions of Americans will soon receive a check for $1400. This payment is intended to boost the economy, which has been seriously affected by the COVID-19 crisis. But two out of five recipients plan to allocate some of it to Bitcoin.
That would be nearly $40 billion out of a total of $380 billion that could benefit Bitcoin and stock purchases on the financial market. And this isn’t the first study to suggest this.
A month earlier, a study by Deutsche Bank came to the same conclusion. It suggested that $170 billion could be allocated to the equity market. According to Mizuho Securities, that’s 20% of the stimulus checks that would be converted (up to 20%), into Bitcoin and/or stocks.
13% of those surveyed would even consider allocating 20-80% of that amount to these assets. But which of Bitcoin or stocks will appeal more to these new investors? Cryptocurrencies stand out largely in terms of popularity.
“Bitcoin is the preferred investment choice for check recipients. It accounts for nearly 60% of incremental spending, which can imply $25 billion in additional bitcoin spending from stimulus checks,” notes Mizuho Securities.
“This represents 2-3% of bitcoin’s current $1.1 trillion market capitalization,” continue its analysts, Dan Dolev and Ryan Coyne. A prospect likely to boost the value of BTC?
After a euphoric weekend, the price of Bitcoin fell sharply from over $60,000 to under $55,000. According to Cointelegraph, one of the reasons for this correction was a record $500 million in liquidations on the major exchanges.
“There is an excess of greed in the system, with 60% of contracts leveraged 20x or more. Long liquidations are an artifact of the current bull market,” commented Glassnode’s founder on Twitter.