Stimulus Check in the Bank, Bitcoin in the Wallet?

Woman looking at a trading chart on a tablet

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With the third round of stimulus checks now headed to bank accounts, the burning question is what will consumers do with the money: cover basic bills, pay down debt, add to savings, put it into investments? One new survey shows 36% of people are going to spend at least part of it on stocks and Bitcoin, with the cryptocurrency being the more popular investment choice.

In fact, the survey findings from Mizuho Securities suggests 10%, or $38 billion of the $380 billion in direct stimulus checks, may be used to buy Bitcoin and stocks, the investment bank said in a research report on Monday. Investors could use almost $23 billion in stimulus check money on Bitcoin alone, adding some 2% to Bitcoin's current $1.1 trillion market capitalization, Mizuho said. (Note: Some of these dollar figures are different from Mizuho’s because the firm rounded off heavily.) 

Of those surveyed, 21% planned to invest up to 20% of their stimulus money in these two assets, 13% were expecting to invest 20%-80%, and 2% were planning to invest more than 80%. In addition, 61% of respondents showed a preference for Bitcoin, Mizuho said.

Individual investors have flocked to the stock market in droves over the past year, with COVID-19 restrictions keeping people home and commission-free trading on apps like Robinhood making it even easier to jump in. (The surge in GameStop shares was another factor—retail investors banded together on Reddit to trade against hedge funds and force them out of their positions.) 

Add stimulus checks to the equation, and you’ve got a retail investor boom. A survey of online broker users conducted by Deutsche Bank in February showed that more than half of those who received the second stimulus check of up to $600 per person invested some of it in the stock market. Robinhood, too, has seen signs of check-powered investing. When the first round of $1,200 checks were distributed last spring, it saw an increase in the share of $1,200 and $2,400 deposits. 

For Mizuho’s survey, the firm said it questioned 235 people with less than $150,000 in annual income, of whom about 200 said they expect to receive the third round of direct stimulus payments (up to $1,400 per person) in the coming days.