According to a new survey from Mizuho Financial Group, Inc. (TYO: 8411), nearly $40 billion of the new stimulus checks could be spent on Bitcoin and stocks.
What Happened: The survey finds that 10% of the $380 billion in direct stimulus checks are likely to be used to fund the purchase of the market-leading digital currency in addition to equities.
"The survey predicts that bitcoin will account for 60% of total incremental investment spend. We calculate it could add as much as 23% to bitcoin's current $1.1 trillion market value,” said Mizuho’s managing director Dan Dolev.
The Mizuho team surveyed approximately 235 people with less than $150,000 of household income. Close to 40% of these respondents expected to use a portion of their checks to invest, and the majority said that they preferred Bitcoin to stocks.
Dolev noted that Visa Inc (NYSE: V), MasterCard Inc (NYSE:MA), PayPal Holdings Inc (NASDAQ:PYPL), and Square Inc (NYSE:SQ) would likely be the stocks that benefit the most from the stimulus-funded Bitcoin and equity purchases.
Why It Matters: The latest round of stimulus checks will see $1.9 trillion being distributed to U.S households in denominations of $1,400.
According to Bitcoin Stimulus, a website dedicated to tracking the value of each stimulus check invested in Bitcoin, a $1200 April 2020 stimulus check invested in Bitcoin has grown by 738% to $10,056.
As market analysts project even higher inflation forecasts as a result of the latest stimulus package, Bitcoin’s popularity as an investment choice to hedge against inflation seems to have grown too.