Another round of stimulus checks could provide a blow to stocks and, in particular, bitcoin, according to a poll released Monday by Mizuho Securities.
The survey of 235 people who expect to receive checks courtesy of the latest round of COVID-19 aid signed into law by President Joe Biden found that two out of five beneficiaries intend to invest at least some of the revenue in bitcoin and shares. Based on the answers, 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 acquisitions.
Read: “$ 1.9 trillion seems fake, but $ 7,000 seems life-changing”: 3 Americans tell MarketWatch how they will spend their incentive checks
This is in line with the results of other surveys and a narrative that has accompanied an increase in the activity of individual investors during the COVID-19 pandemic. Analysts and economists have speculated that blockchain-induced boredom, along with previous incentive payments and a lack of activity to spend them, has sparked an increase in the opening of online brokerage accounts, as well as interest in so-called memes like GameStop Corp. GME,
and AMC Entertainment Holdings Inc. I HAVE C,
See: Individual investors have returned – this is what it means for the stock market
When it comes to the current round of payments, a survey conducted by Deutsche Bank at the end of last month also found investors ready to use the money for trading. In fact, that survey found investors even more eager to push money into the market, estimating about $ 170 billion in potential stock market inflows out of an estimated $ 465 billion direct payment.
Check it out: A new wave of fearless retail investors could be ready to pour $ 170 billion into shares, says Deutsche Bank
Following the survey, Mizuho found that approximately 20% of check recipients expected to allocate up to 20% of their checks to bitcoin and / or shares, while 13% expected to allocate 20% to 80% and 2% they expected to put 80% or more on 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 accounts for nearly 60 percent of incremental spending, which could involve $ 25 billion in bitcoin incremental spending on stimulus controls, “Mizuho analysts Dan Dolev and Ryan Coyne wrote in a note Monday (see chart above). “This represents 2-3% of the current $ 1.1 trillion Bitcoin market capital.”
Some Americans may have already received their money. The oldest batches of payments, coming from direct deposits, were due to successful accounts over the weekend. Pre-loaded paper checks and debit cards will begin arriving in the coming weeks, according to IRS and Treasury Department officials. The IRS has said it will not charge the third round of debit card payments received by a person in the first two rounds.
See: When will you receive the $ 1,400 incentive check? Some payments have already arrived, but many will arrive on Wednesday
It all comes as Bitcoin manifests its brand volatility, retreating on Monday, after exceeding for the first time over the end of $ 60,000 over the weekend. In recent transactions, bitcoin BTCUSD,
decreased by more than 6% to 56,337.
Meanwhile, shares were largely lower after DJIA Dow Jones Industrial Average,
S&P 500 SPX,
and the Russell 2000 RUT cap,
posted records on Friday. Investors continue to monitor bond yields. Yield on the 10-year grade TMUBMUSD10Y,
increased for six consecutive weeks, causing a rotation relative to high-capacity growth stocks with large flights to more sensitive actions to the business cycle.
Read also: “There will be no peace” until the 10-year Treasury yield reaches 2%, says the strategist