Nobody said Americans had to spend their COVID-19 stimulus checks on necessities like food, housing and utility bills (though many had no choice). Some have spent part of their stimulus money on investments in Bitcoin — and they’ve turned a tidy profit in the process.
An analysis by Cointelegraph found that since the first stimulus check was issued in April 2020, a “timely” investment of $3,200 worth of stimulus money into Bitcoin would have returned a total profit of $4,514 by the end of October 2021 — a gain of about 140%.
As Cointelegraph noted, the average American taxpayer has received three rounds of stimulus checks from the federal government: one beginning in April 2020, the next beginning in December 2020, and the third beginning in March 2021. In the Cointelegraph study, 11% of respondents between the ages of 18 to 34 reinvested a part of their stimulus checks into cryptocurrencies.
Those who invested the first round of stimulus payments into Bitcoin would have realized a net profit of about 442% as of Oct. 31, 2021, by turning a $1,200 investment into $5,304. Investing the second stimulus check of $600 would have netted a profit of about $312, for a 152% gain. The average amount for the third stimulus check, about $1,400, would have returned a more modest $98 profit – a return of 7% – due to Bitcoin’s volatility in recent months.
Cointelegraph arrived at the $4,514 figure by factoring in when average investors might have bought Bitcoin.
As GOBankingRates previously reported, the world’s biggest cryptocurrency has stabilized somewhat in recent weeks after a bumpy ride earlier in the year. Because of its long-term potential, you might not want to cash out Bitcoin when its price spikes. At the same time, you probably don’t want to put too much of your money into speculative assets like crypto. Financial advisors recommend confining crypto to no more than 5% of your total investment portfolio.
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Last updated: November 1, 2021