Another round of stimulus controls could provide an opportunity for stocks and especially bitcoin, according to a survey published Monday by Mizuho Securities.
The survey of 235 people waiting to receive checks courtesy of the latest round of COVID-19 relief enacted by President Joe Biden found that two in five recipients plan to invest at least a portion of the proceeds in bitcoin and stocks. Based on 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.
Read: ‘$ 1.9 trillion seems fake, but $ 7,000 seems to change lives’: 3 Americans tell MarketWatch how they will spend their stimulus checks
That’s in line with the findings of other surveys and with a narrative that accompanied an increase in activity by individual investors during the course of the COVID-19 pandemic. Analysts and economists have speculated that closure-induced boredom coupled with past stimulus payments and a lack of activities to spend them have led to a surge in online brokerage account openings, as well as interest in so-called meme stocks. as GameStop Corp. GME,
and AMC Entertainment Holdings Inc. AMC,
Watch: Individual Investors Are Back – Here’s What It Means For The Stock Market
In regards to the current round of payments, a Deutsche Bank survey late last month also found that investors were ready to use the money to trade. In fact, that survey found that investors were even more eager to get money into the market, estimating roughly $ 170 billion in potential inflows to the stock market from an estimated $ 465 billion in direct payments.
Check out: A new wave of intrepid retail investors could be poised to invest $ 170 billion in equity, Deutsche Bank says.
Digging deeper, Mizuho’s survey found that around 20% of check recipients expected to allocate up to 20% of their checks to bitcoins and / or stocks, while 13% expected to allocate 20% to 80% and 2% expected to place 80% or more in the markets.
And among bitcoin and stocks, the cryptocurrency was by far the most popular option.
“Bitcoin is the preferred investment option among check recipients. It comprises almost 60% of incremental spending, which may imply $ 25 billion of incremental spending in bitcoins from stimulus controls, ”wrote Mizuho analysts Dan Dolev and Ryan Coyne, in a Monday note (see chart above ). “This represents 2-3% of Bitcoin’s current $ 1.1 trillion market capitalization.”
Some Americans may have already received their money. The first batches of payments, from direct deposits, were due to reach the accounts over the weekend. Paper checks and pre-loaded debit cards will start arriving in the coming weeks, according to IRS and Treasury officials. The IRS said it would not charge the third round of debit card payments that a person received in the first two rounds.
Watch: When will you receive your $ 1,400 stimulus check? Some payments have already arrived, but many will arrive on Wednesday
It all comes as bitcoin exhibits its signature volatility, backing off on Monday after surpassing the $ 60,000 milestone for the first time over the weekend. In recent transactions, bitcoin BTCUSD,
it dropped more than 6% to 56,337.
Stocks, meanwhile, were mostly lower after the Dow Jones Industrial Average DJIA,
S&P 500 SPX,
and the Russell 2000 Small Cap RUT,
The published record ends on Friday. Investors continue to monitor bond yields. The yield of the 10-year note TMUBMUSD10Y,
has risen for six consecutive weeks, prompting a shift from previously high-flying large-cap growth stocks to stocks more sensitive to the business cycle.
Read also: ‘There will be no peace’ until 10-year Treasury yield hits 2%, strategist says