The U.S. stimulus checks are finally arriving in the bank accounts of those affected by the COVID-19 pandemic. Close to 22 million people have lost jobs in the country over the past month and in an attempt to financially equip them to make it through the current troubled times, the U.S. government is paying the populace checks bearing a sum of $1,200. And although the vast majority of recipients are using the amount to buy essential goods, some are choosing to spend a part of the sum to purchase Bitcoin (BTC).
People Are Buying Essentials and BTC With Stimulus Checks
The novel coronavirus has wreaked havoc in the global economy unlike anything we’ve ever witnessed before. Reports published and studies performed by economic and financial institutions paint a grim picture of the health of the global economy for the coming few years.
While the future looks bleak enough, it’s the present times that look more worrisome and demand greater action. Different nations across the world are employing different coping strategies, ranging from dramatic austerity measures to changing macroeconomic policies, and in the case of the U.S., distributing $1,200 worth stimulus checks.
Predictably enough, the majority of check recipients spent the money on essentials, including food, money transfers, gas, grocery items, and bill payments. However, a sizeable chunk of recipients spent a part – or in some cases – all of $1,200 on BTC.
Fiat Losing Trust Among People?
According to a recent tweet by Coinbase CEO, Brian Armstrong, data suggests the number of $1,200 deposits to the exchange more than quadrupled this week. At their peak, they comprised approximately 0.4% of all inflows. Clearly, it’s not hard to decode where this fresh demand for BTC sprang up from.
Further, it’s also worth noting that it’s not only the long-term holders or Bitcoin maximalists who are spending part of their stimulus checks on the premier cryptocurrency.
The recent extraordinary actions taken by the U.S. Federal Reserve, including pumping $2 trillion minted out of thin air into the economy have considerably eroded the public’s trust in the longevity and utility of the USD.
As a hedge and alternative to fiat, many have chosen to trod down the Bitcoin path trusting the security and fungibility of the digital currency. Whether Bitcoin is able to stand the test of time and emerge as a reliable hedge against the good old legacy financial assets, only time will tell.