Digital Assets: Stimulus Checks Could End Up Chasing Bitcoin And Stocks (Mizuho)
A survey by Mizuho Securities found nearly $40 billion of stimulus money could be used to buy bitcoin and stocks.
Nearly 10% of the direct stimulus amount of $380 billion could potentially end up being used not for groceries and healthcare but instead in bets on volatile assets such as bitcoin and stocks said a report in Yahoo Finance that cited a survey by Mizuho Securities.
Eligible Americans are likely to receive checks for $1,400 from the $1.9 trillion COVID-19 relief package recently signed into law by President Joe Biden.
A survey by Mizuho Securities covered 235 individuals earning less than $150,000. Key findings include:
- About 200 individuals are hoping to get their third stimulus installment in the coming days
- Nearly 40% of these are looking to invest at least a part of the money.
- “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 $1.1t trillion market value,” said Mizuho managing director Dan Dolev.
- Popular stocks on people’s shopping lists include Visa (NYSE: V), MasterCard (NYSE: MA), PayPal (NASDAQ: PYPL), and Square (NYSE: SQ).
Deutsche Bank survey
The Mizuho survey results echo those from a Deutsche Bank survey of stock traders reported last week by CNBC.
Deutsche surveyed 430 investors that conducted online trading. It found that
- half of the respondents between 25 and 34 years old planned to spend 50% of their stimulus payments on stocks.
- 18- to 24-year-old retail investors planned to use 40% of their stimulus checks on stocks.
- Retail investors in the age group of 35- to 54-years planned to use 37% of their checks on stock market investments.
The survey, therefore, estimated that about $150 billion out of the stimulus amount of $405 billion could head for stocks. Assuming only 20% of check recipients have trading accounts, “that would still provide around circa $30 billion of firepower” aimed at stocks.
Feature Image: Wikimedia Commons
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