Armed with a fresh round of stimulus checks, Americans may be ready to shop...for some bitcoin and stocks.
A new survey out of Mizuho Securities on Monday estimates that 10%, or nearly $40 billion of the $380 billion in direct stimulus checks, may be used to purchase bitcoin and stocks. Mizuho managing director Dan Dolev and his team surveyed approximately 235 individuals with less than $150,000 of household income. Of that, about 200 said they expect to receive the third round of direct stimulus payments in the coming days.
Nearly 2-in-5 check recipients expect to use some portion of their checks to invest. And stimulus check recipients prefer bitcoin over stocks, according to the survey.
"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," Dolev writes.
Dolev says stocks from his coverage universe that should benefit the most from people buying equities with their checks include Visa, MasterCard, PayPal, and Square.
Mizuho isn't alone in its call on the use of stimulus checks.
A good chunk of the new stimulus money about to be funneled into American households shortly via the $1.9 trillion COVID-19 relief bill may find its way into the stock market, Goldman Sachs says.
"We expect households will be the largest source of equity demand this year," Goldman's chief U.S. equity strategist David Kostin wrote recently. "We raise our household net equity demand forecast to $350 billion from $100 billion, which reflects faster economic growth and higher interest rates than we had assumed previously, additional stimulus payments to individuals, and increased retail activity in early 2021.
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.
Roughly 90% of American households will be eligible for stimulus checks, according to CNN. For those eligible, they stand to receive a $1,400 check. Considering dependents are included, a couple with two children could receive up to $5,600.
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