Bitcoin $10K+, Some Say They’ll Use 2nd Stimulus Check To Buy

Written by Dana Sanchez

Jul 27, 2020

The price of bitcoin spiked to $10,000+ within hours after the second round of U.S. government stimulus checks were announced. Some say they’ll use theirs to buy bitcoin. Image by Autumn Keiko

In April, after the first round of $1,200 government stimulus checks started pouring into the U.S. economy, Coinbase digital currency exchange CEO Brian Armstrong reported a fourfold increase in the number of deposits and buys worth $1,200.

U.S. investors who spent their first $1,200 stimulus checks on bitcoin have seen a more-than 40-percent return as BTC passes $10,200, Cointelegraph reported.

As the U.S. government prepares to approve the second round of stimulus checks, cryptocurrency evangelists have seized on the opportunity to tout the benefits of buying bitcoin with their checks, Decrypt reported.

“If they government sends out a $1,200 stimulus check, the entire #crypto community is going to put it into #Bitcoin,” journalist David Gokhshtien tweeted.

“What I do get will go straight to Bitcoin, just like last time,” said rapierce0238.

“Straight to the BTC, straight to the cold storage wallet,” Reddit user Limited-Visibility said.

However, not everyone is buying bitcon with government money.

Jason Deane, an analyst at analytics website Quantum Economics, noted that relatively few people actually bought bitcoin last time around. “There does seem to be some evidence that specific amounts of $1,200 were transferred to exchanges such as Binance (U.S.) and Coinbase, and used to buy Bitcoin at the time of the last stimulus, but it didn’t appear to be significant enough to affect price,” Deane told Decrypt.

The pandemic cost 40 million-plus jobs in the U.S., some if which have come back. The stimulus money was a way to help pay for things like food, rent and bills. The first round of checks started coming in late March. Qualified citizens received $1,200 as part of the $1 trillion stimulus package.

“There’s a $1,200 check coming that’s going to be part of the new package,” White House chief economic advisor Larry Kudlow told CNN on the weekend.

“If you invested the US stimulus check into #Bitcoin: Now your $1,200 are worth $1,835,” @crypto_rand tweeted.

Although Treasury Secretary Steven Mnuchin promised the second stimulus checks will come in August, many people haven’t received their first ones yet, Newsweek reported. The second round will be based on the same formula as the earlier CARES Act bill. Individuals earning $75,000 or less a year received the full $1,200. More than 160 million people received stimulus checks.

Anyone who invested $1,200 in April and held onto their bicoin investment now has around $1,750.

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Hours after the government announced that more $1,200 stimulus checks were coming to U.S. taxpayers, Bitcoin experienced a surge, rising 3.1 percent from $9,941 to $10,249 in four hours, Cointelegraph reported. When U.S. officials first announced the new $1 trillion stimulus package on July 23, the price of BTC rose past $9,500, breaking a long stretch of low volatility between $9,000 and $9,500.

Analysts now expect traders to target $10,500 but price estimates above this level range from $11,000 to $16,000.

The new round of $1200 stimulus checks could be different, Deane told Decrypt. “The effects of devaluation are starting to be understood more broadly,” he said, adding that social media users accounts “have continuously broadcast how well the original investment of the check has fared.” That may encourage more people to invest this time around.

“With an already bullish move in progress, this could have a positive impact on price,” Deane said.

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