A March 15 survey conducted by Mizuho Securities found out that 40% of stimulus money recipients plan to invest in bitcoin and stocks. The survey covered stimulus expenses or what they expect Americans to purchase with the direct checks.
In a Monday interview with CNBC Monday, Dan Dolev, Senior Equity Analyst for Mizuho expressed surprise at the results. In fact, he asked his team to spend time “sanity-checking” the data’s accuracy. He added that although the survey data showed surprising results, they accurately represent how consumers might spend their stimulus money.
Mizuho Securities Co, a wholly-owned subsidiary of Mizuho Financial Group, conducted a survey on 235 Americans who make less than $150,000 annually. This income bracket makes respondents eligible for stimulus checks of up to $1,400 per person.
$40 Billion Stimulus To Go To Investing in Bitcoin and Stocks
From the $1.9 trillion American Rescue Plan signed by President Joe Biden, direct stimulus checks will take up $380 billion, or 10% of the budget. The Mizuho survey reported that Americans plan to invest around 10% or $40 billion of stimulus money in Bitcoin or stocks.
The survey also found that between the two instruments, investors will likely put their stimulus money into bitcoin than stocks. In fact, 61% of respondents who plan on investing said they will put money in bitcoin. Meanwhile, only 39% said they will buy stocks.
Previous Stimulus Money
Dolev reacted to the findings. “The survey predicts that bitcoin will account for 60% of total incremental investment spend. We calculate it could add as much as 2-3% to bitcoin's current $1.1 trillion market value,” he noted. “It is what it is,” Dolev concluded.
The survey results confirmed what some Americans did last year upon receiving earlier stimulus money. Last April, Coinbase CEO Brian Armstrong tweeted a chart showing a spike in $1,200 deposits on the San Francisco-based exchange. That coincided with the release of $1,200 stimulus checks issued during the time.
Bitcoin’s $1.1 trillion market
Not surprisingly, Bitcoin is hitting the news lately. The foremost cryptocurrency registered a new milestone as it hit $60,000 over the weekend on the way to a new high of $61,556.59. Stimulus hopes and institutional investor demand boosted the digital asset as its price kept going up. However, the excitement died down a bit as Bitcoin settled at 54,669.10 by March 16.
For stocks, respondents mentioned buying equities in companies already invested in Bitcoin. These include payment processing companies such as Visa, Mastercard, PayPal, and Square. With Bitcoin included in these financial companies, would-be investors seem to prefer financial tech stocks as the industry where to put money into. In addition, Goldman Sachs’ chief US equity strategist David Kostin finds households as the key investors this year. He believes that American households will push net equity demand to new levels. “We expect households will be the largest source of equity demand this year,” he noted. “We raise our household net equity demand forecast to $350 billion from $100 billion, which reflects faster economic growth and higher interest rates than we had assumed previously, additional stimulus payments to individuals, and increased retail activity in early 2021,” Kostin added.
Incoming Stimulus Money
Rough estimates place 90% of American households as eligible for stimulus checks. While individuals will receive a $1,400 check, couples can receive separate checks. Combined with two dependents, a household can receive up to $5,600.
Since this week, reports say that Americans are starting to receive their relief checks from the US government. 200 out of the 235 participants say they expect their stimulus checks to arrive within a few days. Also, two out of five respondents say they will allow a portion of the money for investment purposes.
Watch the CNBC news video where Mizuho’s Dan Dolev says that 10 percent of stimulus checks may go to bitcoin and stocks:
Are you eligible for a stimulus check? Will you allocate a portion of your stimulus money to invest? Let us know what you think about investing in Bitcoin and stocks using stimulus checks. Share your thoughts below in the comments section.