It looks like many Americans are potentially spending their newfound stimulus checks on bitcoin and other cryptocurrencies. Several digital currency trading platforms, such Coinbase, are reporting purchases of exactly $1,200 over the past few days, the maximum amount of the checks that citizens are receiving from the federal government.
Paper Checks Are Going Towards Crypto
These checks are designed to give Americans some relief from the coronavirus pandemic that first began wreaking havoc on the country’s economy in early March. Since then, several businesses have shut down, while unemployment is at an all-time high and people are unable to leave their homes given the social distancing regulations that are being heavily enforced by governors and state legislators across all 50 states.
To help citizens deal with their lack of employment and the financial strain, the federal government signed a $2 trillion economic stimulus package into law that included deferred loan payments for small businesses, as well as checks of up to $1,200 for U.S. citizens that made less than $75,000 per year.
For the past week, some of these checks have been mailed out or have been directly deposited into people’s bank accounts, and some, it appears, are using this money to boost their crypto holdings and increase their digital wealth.
According to a recent tweet submitted by Coinbase CEO Brian Armstrong, the exchange has experienced several buys and deposits worth $1,200 over the past several days. Overall, the trading platform saw a 0.3 percent spike in such deposits, suggesting that a lot of stimulus money has gone towards crypto.
The U.S. division of Binance – arguably the largest and most popular cryptocurrency trading platform in the world – says it’s been experiencing similar results. A spokesperson for the company recently explained:
People do seem to have deposited exactly $1,200 into Binance U.S. in the past couple of days.
The situation presents a unique set of circumstances in that people are not necessarily buying food or other provisions to keep themselves set during the pandemic but are instead looking to experiment with investments.
Investing the Surplus and Boosting One’s Wealth?
Cryptocurrency is not necessarily mainstream. When compared with credit cards or cash, crypto is relatively low on the financial ladder, and yet with so much money being thrown around as of late from the federal government, people appear to be losing their faith in standard fiat and are now looking to diversity themselves with crypto under their belts.
Another idea is that despite record unemployment in the country, many people have continued working and have remained at their jobs, and are thus stable enough to invest any surplus, rather than utilize it for bills or other necessities. Either way, perhaps this entire pandemic has helped to somehow boost crypto’s legitimacy.