Will the U.S. Government Allow $40 Billion Stimulus Check Inflow to Bitcoin?

Last week, U.S. President Joe Biden passed the $1.9 trillion COVID-19 relief package while kickstarting the stimulus check bank deposits by the last weekend. As per the CNN report, nearly 90% of American households shall be eligible for the $1400 stimulus checks.

There’s some excitement around that some of the retail players will put part of the stimulus checks in Bitcoin and stocks. However, the opinions remain divided among some of the big investors and survey houses.

On Monday, March 15, Mizhou Securities released a survey estimating that 10% i.e. $40 billion of $380 billion in direct bank transfers shall be coming to Bitcoin and stocks. The team at Mizhou surveyed nearly 235 individuals having under $150,000 in household income.

Nearly 2 in 5 respondents said that they want to invest part of their stimulus checks, however, preferring Bitcoin over stocks. Mizuho managing director Dan Dolev told Yahoo Finance:

“The survey predicts that bitcoin will account for 60% of total incremental investment spend. We calculate it could add as much as 2-3% to bitcoin’s current $1.1t trillion market value”.

Note that Mizhou is not the only firm predicting stimulus money inflow into Bitcoin (BTC). Goldman’s chief U.S. equity strategist David Kostin also said:

“We expect households will be the largest source of equity demand this year. The latest round of stimulus checks will be sizable, hence Wall Streeters optimism some of the funds will find their way into asset classes such as bitcoin and stocks”.

Over the last year post the COVID-19 pandemic, Americans have been putting part of their cash into Bitcoin (BTC). Billionaire Ray Dalio, the founder of Bridgewater Associates, thinks that the U.S. government won’t allow any stimulus inflows into Bitcoin.

U.S. Government Might Block Capital Inflows Into Bitcoin (BTC)

In his latest LinkedIn post on Monday, March 15, Ray Dalio shows skepticism on whether the U.S. government will allow any further investments from stimulus payments into Bitcoin (BTC) or even gold. Dalio states that there could be “shocking” tax hikes to manipulate investments in different asset classes. He writes:

“If history and logic are to be a guide, policy makers who are short of money will raise taxes and won’t like these capital movements out of debt assets and into other storehold of wealth assets and other tax domains so they could very well impose prohibitions against capital movements to other assets (e.g., gold, Bitcoin, etc.) and other locations.”

However, Dalio makes it clear that it’s not advisable to hold cash but rather put that money in a “well-diversified” portfolio of higher returning assets.