Another round of stimulus checks could provide a boost of momentum for stocks and especially for bitcoin, according to a survey released on Monday by Mizuho Securities.
The survey of 235 individuals hoping to receive checks as a courtesy of the latest round of relief COVID-19 signed by President Joe Biden found that two out of five recipients plan to invest at least part of the proceeds in bitcoins and stocks. Based on the responses, about 10% of total gross payments, or about $ 40 billion of the $ 380 billion in direct checks, could be allocated to the world’s most popular digital asset and stock purchases.
Reading: ‘$ 1.9 trillion seems fake, but $ 7,000 seems life-changing’: 3 Americans tell MarketWatch how they are going to spend their stimulus checks
This is in line with the findings of other research and with a narrative that accompanied an increase in the activity of individual investors throughout the COVID-19 pandemic. Analysts and economists speculated that the boredom induced by the blocks, together with previous stimulus payments and the lack of activities to spend them, has spurred an increase in the opening of online brokerage accounts, as well as interest in so-called meme stocks like GameStop Corp. GME,
and AMC Entertainment Holdings Inc. AMC,
To see: Individual investors are back – here’s what it means for the stock market
When it comes to the current payment round, a Deutsche Bank survey at the end of last month also found investors ready to use the money in trading. In fact, this research found investors even more eager to put money on the market, estimating approximately $ 170 billion in potential stock market entry, from an then estimated $ 465 billion in direct payments.
Output check: A new wave of fearless retail investors may be ready to pour $ 170 billion into shares, says Deutsche Bank
In detail, the Mizuho survey found that about 20% of check recipients should allocate up to 20% of their checks to bitcoin and / or stocks, while 13% expected to allocate 20% to 80%, and 2% expected to place 80% or more in the markets.
And between bitcoin and stocks, cryptocurrency was by far the most popular choice.
Mizuho Securities
“Bitcoin is the preferred investment choice among check recipients. It comprises almost 60% of incremental spending, which could mean $ 25 billion in incremental spending on stimulus checks bitcoin, ”Mizuho analysts Dan Dolev and Ryan Coyne wrote in a note on Monday (see chart above) ). “This represents 2-3% of Bitcoin’s current $ 1.1 trillion market value.”
Some Americans may have already received their money. The first batches of payments, from direct deposits, were due to be settled on the weekend. Pre-loaded paper checks and debit cards will begin arriving in the coming weeks, according to officials from the IRS and the Treasury Department. The IRS said it would not load the third round of payments on a debit card that a person received in the first two rounds.
To see: When will you receive your $ 1,400 stimulus check? Some payments have arrived, but many will settle Wednesday
It all happens at a time when bitcoin exhibits its trademark volatility, retreating on Monday after having passed the $ 60,000 mark for the first time over the weekend. In recent trades, bitcoin BTCUSD,
fell more than 6% to 56,337.
The shares, in turn, fell mainly after the Dow Jones Industrial Average DJIA,
S&P 500 SPX,
and the small capitalization Russell 2000 RUT,
posted record ends on Friday. Investors continue to monitor bond yields. The yield of the 10-year banknote TMUBMUSD10Y,
it rose for six consecutive weeks, triggering a rotation of large-cap growth shares, previously of a high level, towards actions more sensitive to the economic cycle.
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