Roughly $40 billion from US stimulus checks are about to flood the crypto market

 

• The United States will see its third round of stimulus checks on March 17, with the possibility of at least $40 billion to be invested in the cryptocurrency markets.
• It is estimated that fears over inflation could be one of the main reasons Americans will invest in Bitcoin to hedge. 
• If the first stimulus check of $1,200 were invested into BTC, investors would have netted 851% profits as of March 14.

The latest round of stimulus checks in the United States is to be released by the country's major banks on March 17. 

Bitcoin's price surged past the $57,000 level last week after U.S. President Joe Biden signed the $1.9 trillion COVID-19 relief package into law, which will pay out $1,400 to American citizens. The world's largest cryptocurrency reached an all-time high of $61,000 over the weekend. 

Despite BTC's recent retracement to below $55,000 shortly afterward, it is expected to see an uptrend as stimulus money enters the crypto markets. 

Stimulus money to enter the cryptocurrency market

Mizuho estimated that roughly $40 billion of the $380 billion in stimulus checks could go into Bitcoin and stocks. The third-largest financial company in Japan surveyed 235 people with a household income of $150,000 or less. 

Lead analyst Dan Dolev affirmed that respondents were more likely to invest their stimulus money into Bitcoin than stocks. Approximately 61% of the people surveyed said they would be putting money in BTC, and 39% of the respondents said they would be investing in traditional assets. 

Dolev was surprised by the results and revealed that the team spent a lot of time "sanity checking" the data. Despite the astounding results, the analyst concluded that it is an accurate representation of how individuals may spend their stimulus checks. "It is what it is," Dolev added. 

Renowned technical analyst Alex Kruger cited Bloomberg's latest stimulus survey and agreed that at least $10 billion would go directly into the crypto markets. As demand increases for safe-haven assets due to rising fears around inflation, Kruger expects a massive capital influx into BTC that could "have a significant impact on prices."

Stimulus Checks Expenditure Projections

JP Morgan Chase strategists Nikolaos Panigirtzoglou believes that Bitcoin could see significant upside in the long term. He anticipates that the flagship cryptocurrency will reach above $146,000 by the end of this year.

When considering that the last $600 stimulus check might have helped push Bitcoin price from $28,800 to a high of $34,371 as the stock market was closed on New Year's Day, Panigirtzoglou's forecast looks reasonable. 

Market participants should note that those who invested $1,200 from the first stimulus package have generated a return on investment of over 825%. While the current market conditions are different than last year, such significant gains put into perspective why between $40 to $10 billion will enter the space now that many Americans will be seeing green today.